Turkey's own political situation is unstable. In 20 16, the military coup failed and Turkey changed from parliamentary system to presidential system. Its term of office can be as long as 2029. Coupled with many terrorist attacks, the economic growth rate slowed down to 3%, and the investment prospects were not as good as before.

Turkey's foreign debt accounts for 55% of GDP, and its economy relies heavily on foreign direct investment. In other words, once foreign capital is withdrawn, it will have a devastating impact on its economy. Trump's tariff increase on Turkey is the fuse for the withdrawal of foreign capital.

In order to retain funds, Turkey's countermeasure is to raise interest rates. At present, the interest rate in Turkey is above 17%, but the inflation rate in Turkey is serious, that is to say, the real interest rate is 2%, so it is impossible to retain funds.

The withdrawal of foreign capital, selling lira in the foreign exchange market and buying domestic currency, lira flooded in.

If Turkey has enough foreign exchange reserves, then Turkey can stabilize the exchange rate by buying lira in the foreign exchange market. However, as of May this year, Turkey's foreign exchange reserves have fallen below 90% of the total foreign debt. In other words, Turkey's foreign exchange reserves are seriously inadequate.

Although China is also affected by the tariff increase imposed by the United States, the political situation in China is stable, the economic growth rate is relatively stable, and there is no particularly serious political risk. The proportion of foreign investment in China's GDP is 1.2%, and China's foreign exchange reserves are almost twice the total foreign debt. Even with the withdrawal of foreign capital, China's foreign exchange reserves are sufficient to maintain the current exchange rate stability.

So China's currency will not collapse like the Turkish lira.