Analysis of Türkiye's and China's exports in the perspective of economic complexity and comparative advantage

Although there are many indicators that express the development levels and global competitiveness of countries, the 'Economic Complexity Index' is perhaps the most important of these indicators. The concept of economic complexity states that goods and services cannot be developed using only raw materials, labor and capital. Because, when bringing these inputs together, output must be obtained by adding knowledge, innovation, R&D and added value. Only in this case the product becomes more original and complex. However, countries cannot develop and gain competitiveness by consistently producing the same products and gaining comparative advantage. For this reason, countries need to produce and export high value-added, original and rare products in the world from an innovative perspective. At the same time, the variety of exported products must be high and spread to all geographies of the world in order for countries to appeal to global markets with more complex and competitive products. In short, it is essential for countries to improve their levels of economic complexity to gain comparative competitive advantage in global markets. In this regard, the aim of this master's thesis is primarily to reveal the concepts of economic complexity and Economic Complexity Index with current country examples. In addition, the study aims to analyze the global competitiveness and comparative advantages of Turkey and China, one of the leading developing countries in the world, on the basis of economic complexity. In this context, the Michaely Index was used to analyze the comparative advantages of Turkey and China in exporting the 10 products with the highest and lowest levels of economic complexity in the world. According to the Michaely Index results obtained as a result of the analysis for the period 1993-2022, both Turkey and China do not have a global competitive advantage in the 10 most complex product exports. This situation creates a handicap in terms of economic development for both countries, which are relatively strong in terms of both exports and economic size. However, according to economic complexity index scores, China's economic complexity index was higher than Turkey's in almost all of the years in which the calculation was made.