Ankara targeting influx of Chinese EVs

New rules destined to promote national EV champion and local manufacturing

Türkiye has begun imposing strict tariffs and regulations on EV imports which appear to be aimed at slowing the sale of cheap Chinese-made vehicles. The government last month introduced a new law, effective from 29 December, requiring EV brands to have at least 140 service stations and a call centre in the country to pass customs checks. EVs from countries with which Türkiye has a free trade agreement are exempt, as well as those from the EU due to their shared customs union. Despite the recency of the laws, 600 Chinese-made EVs have already been stopped at the Türkish border. In a related initiative, Türkiye last March increased the customs duty on Chinese-made EVs from 10 to 50 percent.

The move is the latest example of government efforts to establish Togg as Türkiye’s national EV champion. Togg has been a pet project of President Erdoğan since the company’s establishment in 2018. The company’s first car was brought to market two months before last year’s May election. The government has provided Togg with generous support including low -cost loans, tax cuts, land grants and a 30,000-unit purchase order. Even so, the laws are not solely about boosting Togg, but also to encourage local EV manufacturing in Türkiye. However, the laws have a clear downside of slowing EV adoption. Sweden’s Volvo, for instance, has suspended its plans to introduce its EX30 SUV, which it produces in China, to the Türkish market until production of the vehicle begins in Belgium. Türkiye’s EV adoption rate has so far only reached 3 percent.

Ageing East Asia targets migrant labour agreements to mitigate shortages

Despite political complexities, deals could help balance labour shortages and excesses across the region

Deals to transfer large numbers of workers between countries are becoming increasingly common, in an attempt to simultaneously tackle youth unemployment and ageing populations. Negotiations are reportedly underway to migrate up to 100,000 Indian workers to Taiwan. It is expected that they will work in manufacturing, agriculture, and healthcare with salaries equivalent to those of Taiwanese workers. India has spearheaded such deals, having done so with France in 2018 and Japan and the UK in 2021. Similar dynamics are at play across Asia. Indonesia last month revealed plans to send 100,000 workers to Japan until 2029.

The arrangements offer mutual benefit. Taiwan, grappling with an ageing population – 20 percent of which is expected to be over 65 by next year - is facing acute labour shortages. Taiwan is currently experiencing its lowest unemployment rate since 2000. Japan estimates that it will need 6.7 million foreign workers – currently around 1.8 million - by 2040. A staggering 29 percent of people in the country are 65 or older.

India’s economy, while experiencing robust growth, is not generating adequate employment for its youth workforce. It has a youth unemployment rate of approximately 23 percent. Similarly, youth unemployment in Indonesia is around 13 percent, despite the economy growing around five percent for the past two years. Largely homogenous cultures like Japan have struggled to absorb migration on any scale despite a variety of policy efforts and it remains to be seen whether such programs will be effective.

China courts Oman to establish military base

Potential base would challenge US security dominance in the region

In a far less publicised development than the Gaza situation, China has engaged in discussions with Oman over the establishment of a military base, as it seeks to expand its international defence presence. Talks about the base, the specifics of which are unknown, took place between Chinese and Omani military officials late last year. The talks are believed to be part of China’s broader goal to create a global military network, including five overseas bases and 10 logistical support sites across Southeast Asia, Africa and the Middle East by 2030. China has only one existing foreign base, in Djibouti, but has been allowing private contractors to provide military-style security for Chinese investments. According to leaked documents released last year, the Pentagon has detected construction work for a suspected Chinese base in the UAE where Washington had one year prior successfully lobbied to halt construction.

The establishment of a Chinese military base in Oman – where the US has hundreds of troops - would provide a significant challenge to Washington’s dominant military influence in the Gulf. Oman is in a particularly strategic location, sitting on one side of the Strait of Hormuz – a crucial passage for oil and LNG shipments – with Iran on the other. The Strait has been a particular area of turmoil in the US’ recent conflicts with Iran. Placing more pressure on the US in the Middle East would also complicate its stated priority of shifting military and diplomatic resources to Asia. Oman, meanwhile, finds itself in a fine balancing act between maintaining its close security ties with the US and its burgeoning relationship with China – now its largest trade partner.