China says supports Turkey to overcome its economic crisis

China is the latest country to offer some comforting words to Turkey’s President Recep Erdogan, as his country experiences a currency meltdown and a tariff spat with the U.S.

Foreign Ministry spokesperson Lu Yi said China believes that Turkey has the “ability to overcome temporary economic difficulties,” according to a translated statement placed on the ministry’s website Friday. He hoped that all parties concerned would resolve their differences through dialogue.

His comments follow a reported phone call this week between Erdogan and Angela Merkel, with the German chancellor offering to strengthen ties between the two nations.

Turkey’s currency plummeted 20 percent against the greenback in a single trading day last Friday after President Donald Trump announced a doubling of steel and aluminum tariffs on Ankara, in return for the country’s continued detention of American pastor Andrew Brunson.

Russian President Vladimir Putin was one of the first people Erdogan called on that day, increasing speculation that the Turkish leader is moving closer to Moscow as relationships with the U.S crumble. The embattled nation has also seen generosity from Qatar with the Gulf nation pledging $15 billion worth of investment on Wednesday.

Meanwhile, state-owned banking giant The Industrial and Commercial Bank of China (ICBC) reportedly lent $3.6 billion to Turkey back in July — said to be a loan for the energy and transportation sector. When asked about the investment by reporters, Lu Yi said that China has always attached importance to the economic, trade and financial ties it has with Turkey.

The country’s officials would always support Chinese and Turkish companies signing cooperation projects based on market rules, he added.

So far, the lira has lost more than 40 percent of its value against the dollar this year, sparking fears of contagion and a sell-off in emerging markets. Erdogan has been criticised for not allowing the central bank adequate independence to raise interest rates despite an overheating economy and inflation now exceeding 15 percent — far above the central bank’s target of 5 percent.

Source: CNBC