China has overtaken United States as the biggest trading partner of European Union
The People’s Republic of China has overtaken United States (U.S.) as the biggest trading partner of European Union (E.U.), with trade in tune of € 586 billion (U.S.$ 710 billion) in 2020.
As per the data released by Eurostat, the statistics agency of E.U., the European nations exported goods worth € 202.5 billion to China. The imported goods were worth € 383.5 billion. The trade deficit the E.U. has with China also rose 9.9%, expanding from € 164.7 billion in 2019 to € 181 billion in 2020.
A Statement from Eurostat read, “In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (5.6 per cent) and exports (2.2 per cent). At the same time, trade with the United States recorded a significant drop in both imports (-13.2 per cent) and exports (-8.2 per cent).”
While the latest E.U. data did not specify which goods were part of the increased trade with China, the E.U.’s main imports from the country are industrial and consumer products, machinery and equipment, footwear and clothing. The E.U.’s exports to China include machinery and equipment, motor vehicles, aircraft and chemicals.
The U.S. is now the second biggest trading partner with trade worth U.S. $ 671 billion. This is 10% less as compared with U.S. trade with E.U. last year. The relations between E.U. and U.S. went for a tossing during Former U.S. President – Donald Trump’s regime who had the policy of America first. He launched tariffs on Airbus aircraft and levies on a range of European exports, including French wine and Spanish olives.
The figures were similar to China’s official data published in January 2021, which showed trade with the E.U. grew by 5.3% to U.S. $ 696.4 billion in 2020.
The latest trade figures come at a time when the world is severely impacted by the Coronavirus (COVID-19). As per the data, China was the only economy which grew last year. The factories re-opened after the lockdowns. The revival in China’s automobile market and the broader consumer shift towards online consumption, specifically for luxury goods, retained the demand for some European products when overseas markets collapsed elsewhere.
Importantly, E.U. and China recently finalized a ‘E.U.-China Comprehensive Agreement on Investment’ in December 2020. The agreement opens Chinese restricted markets to E.U. businesses in various sectors which include manufacturing, financial services, real estate, construction and auxiliary services to support shipping and air transport. In return, E.U. would provide access to Chinese firms in E.U.’s energy sector, water treatment and public utilities.
The growing trade ties of China with E.U., will not be liked by the President of U.S. – Joe Biden, who has signaled his intent of countering the rise of China and has asked for a stronger coalition with E.U. against China on trade.
