The European Union Chamber of Commerce in China reports that China’s trade surplus reaches US$1.2 trillion and the EU’s deficit with China reaches a critical point
Quick Look
- The annual report of the European Union Chamber of Commerce in China shows that China achieved a trade surplus of US$1.2 trillion last year, accounting for 37% of global container exports.
- The report pointed out that this imbalance stems from global demand and structural problems of overcapacity in China's manufacturing industry and insufficient domestic consumption.
- The EU's trade deficit with China has reached 1 billion euros per day, which is considered a critical point.
AI-generated summary
Why It Matters
The annual report of the European Union Chamber of Commerce in China pointed out that China's trade surplus last year reached 1.2 trillion US dollars, accounting for 37% of global container exports. The report believes that this imbalance is partly due to global demand, but is largely due to the structural imbalance between the rapid expansion of China's manufacturing capacity and insufficient domestic consumption. China's consumer spending has failed to recover since the end of the coronavirus pandemic, while industrial production has grown significantly.
(Deutsche Welle Chinese website) The European Chamber of Commerce in China pointed out in its annual report that last year, China achieved a huge trade surplus of US$1.2 trillion, accounting for 37% of global container exports. According to Chinese data, as of the end of August, the EU's trade deficit with China reached 242 billion euros in the first eight months of this year.
The report pointed out that while this situation is partly due to global demand for Chinese products, it is also "largely" attributed to the structural imbalance between the rapid expansion of China's manufacturing capacity and insufficient domestic consumption. China’s consumer spending has failed to recover since the end of the COVID-19 epidemic. At the same time, industrial production increased significantly.
Jens Eskelund, president of the European Union Chamber of Commerce in China, said on Tuesday that "the current trend is unsustainable." He added that there were "absolutely no signs" that the huge trade imbalance would change in the medium term. The European Union Chamber of Commerce in China represents more than 1,600 European companies operating in China.
EU: Trade deficit with China has reached “critical point”
The EU is also increasingly concerned about the huge trade deficit with China. Brussels believes that China's huge trade surplus is partly due to China's unfair practices, such as government subsidies and artificially undervaluing the yuan. European Commission President von der Leyen said last week that the EU's trade deficit with China has reached a "critical point" of up to 1 billion euros per day, and that she will use "all available means" to reduce the "unsustainable" trade deficit with China.
German Foreign Minister Walderfurt had a phone call with Chinese Foreign Minister Wang Yi on Monday. According to the German Foreign Ministry, economic and trade relations are one of the topics discussed by the two sides. "Trade relations must be based on fair rules and truly equal conditions of competition," the German foreign ministry said on Twitter.
According to China's official Xinhua News Agency, Wang Yi said that China and the EU should not fight a trade war. "We hope that Germany will maintain a rational and pragmatic attitude, play an active role in the EU, and promote the EU to adhere to free trade and abandon protectionism."
At present, the European Commission has successively introduced a number of restrictive measures such as taxing small parcels and significantly raising the basic tariff on steel imports from 25% to 50%.
From October 8th to 9th, senior trade representatives from China and the EU will hold the next round of economic and trade consultations in Beijing. On September 17, Chinese Minister of Commerce Wang Wentao held a video meeting with European Commission Commissioner for Trade and Economic Security Sefcovic on China-EU economic and trade issues.
Further reading: Survey: German companies hope the EU will adopt tougher policies towards China
(AFP, etc.)
What to Watch
AI outlook — possibilities, not facts
The EU will promote a tougher trade policy towards China at the China-EU High Trade Representative Consultation in October
Likely · Within weeks
China and the EU will discuss the trade imbalance issue in October negotiations, but it will be difficult to reach a substantive agreement in the short term
Possible · Within weeks
Open Questions
- What specific measures will the EU take to reduce its trade deficit with China?
- Will China take measures to stimulate domestic consumption and alleviate overcapacity?
- What specific agreements will be reached during China-EU consultations in Beijing in October?
