Facts and figures on EU-China trade - useful for BUSS4 2014 research theme - China

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October 2013 1
Facts and figures on EU-China trade
Did you know?
o China is the second largest economy and biggest exporter in the world
Its growth in 2012 was 7.7 %, and international estimates predict China may be on track
to become the world's biggest economy within the next 10 years, with an internal market
of 1.39 bn potential consumers by the end of 2015. China's rise as a major global
economy was boosted by its WTO membership in 2001, which made it reform and open
up its economy. This provided a platform for China to establish itself as a major global
trader and the world's biggest exporter.
o China and the EU are trading more than 1 billion every day
Just two decades ago, China and the EU traded almost nothing. Today, we form the
second-largest economic cooperation in the world. In a remarkably short timeframe, our
economies have integrated to a point where it is difficult to imagine one without the
other. Our bilateral trade in goods reached 433.6 billion in 2012. Trade in services,
however, is still about ten times lower at 49.8 billion and remains an area full of
potential if China were to open its market more.
o China has become one of the fastest growing markets for European exports
In 2012 our exports to China increased by 5.6% to reach a record 143.9 billion, and
they have more than doubled in the past five years, contributing to rebalancing the
relationship. The EU is also China's biggest export destination, with 289.7 billion in
goods in 2012. This produced a trade deficit of 145.8 billion with China in the same
year, down by 6.6% compared to 2011, and down by 13.9% compared to the 2010
record of 169.3 billion. Europe´s trade deficit with China is mainly caused by sectors
like office and telecommunication equipment, shoes and textiles, iron and steel.
o In the long term, China's importance as a strategic market can only increase
Every year, 20 million Chinese households pass the threshold of household income of
USD13,500 (a threshold at which middle class families become able to afford key
consumer goods and services, like cars). This translates into extraordinary growth
opportunities for European businesses. It should also be noted that even if China's GDP
growth rate is gradually slowing down, its nominal GDP is continuing to grow at a rapid
pace, generating a significant amount of additional output year after year. 90 % of global
economic growth in the next 10-15 years is expected to be generated outside Europe,
a third of it in China alone.
o Reducing the bilateral trade deficit is not about importing less, but exporting more
Through better market access, European exporters should be well placed to increasingly
sell their products on the rapidly expanding Chinese consumer market. By way of
comparison, the EU still exports more than 2.5 times more services to Switzerland
(82.9 billion) than to China (29.8 billion). As a result, the EU still exports more goods
and services to Switzerland (216.3 billion) than to China (173.7 billion). With the USA,
our number 1 trading partner, the difference is even more apparent: the EU exports
double as much goods, and 5 times more services to the USA than to China (2012 data).
o The EU's trade defence instruments cover only a tiny share of the EU's total imports
from China
Trade defence measures are not protectionist tools; they are legal procedures in
accordance with international rules and aim to address unfair trading practices.
The EU bases its trade defence instruments on strict and non-political procedures.
On 17 October 2013 the EU had 52 anti-dumping measures and two anti-subsidy
measures in force against Chinese imports. The combined measures affect less than 1%
of total imports from China.

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October 2013 2
o About half of China's exports are produced by foreign invested companies
Companies from Japan, Taiwan, Hong-Kong and South Korea play a dominant role in
China's so-called "processing trade" process, where imported components are
assembled in China and then exported as finished products. The role of European
enterprises in China's processing trade regime, however, is relatively limited. European
companies mainly invest in China to serve the Chinese market.…read more


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