China intensifies dumping, and EU trade deficit with China expands to 1.18 billion euros per day

China has intensified its dumping of goods, further widening the EU's deficit with China. (Reuters)

[Compiled by Wei Guojin/Taipei Report] The British Guardian reported on the 22nd that as the EU and China negotiate on how to avoid a trade war, the German think tank "Mercator Institute for China Studies" (MERICS) analyzed China's customs data in July and found that the EU's trade deficit with China has further expanded from about 1 billion euros (NT$36.24 billion) per day last year to 1.18 billion euros (NT$42.76 billion) per day.

The new report comes just days after European Commission President Ursula von der Leyen said the trade imbalance with China must be curbed. EU Trade Commissioner Maros Sefcovic is scheduled to visit Beijing on the 8th of next month to meet with Chinese Commerce Minister Wang Wentao.

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MERICS pointed out that "the problem is no longer simply that the EU purchases more Chinese products, but that China purchases fewer European products and sells more products to Europe."

The think tank said, "With the bilateral deficit exceeding 1 billion euros every day, the issue of expanding imbalances is almost certain to become an important agenda for the EU-China meeting in October."

MERICS' analysis of Chinese customs data shows that in July alone, the EU's trade deficit with China reached 36.5 billion euros, up from 32.2 billion euros in July last year. In the first seven months of this year, the trade deficit reached 234 billion euros, 21 billion euros higher than the same period last year.

MERICS said, "The trade imbalance has now exceeded the ratio of 3:1, that is, for every 1 euro of exports to China, the EU imported 3.1 euros of products from China in July. This deficit is equivalent to 1.18 billion euros per day."

Sources in Brussels said one of the countermeasures the EU is considering is imposing quotas on imports of gasoline-electric hybrid vehicles and certain types of chemicals from China. Data shows that China's exports of gasoline-electric hybrid vehicles to Europe have grown more than 10 times from 4,000 units in October 2024 to 50,000 units in July this year.

Jens Eskelund, President of the European Chamber of Commerce in China, also pointed out on the 21st that before the outbreak of the epidemic in 2019, Europe imported 2.5 containers from China for every 1 container exported to China. However, in the first eight months of this year, the ratio expanded to 1:6.

"What worries us is that these developments raise fundamental questions about trade," he said. If trade is done properly, it will create value and efficiency. "However, if trade only creates value for one party and is unprofitable for the other party, the question naturally becomes: Why trade at all?"

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