EU trade with China significantly up in 2014 for both goods and services

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The FINANCIAL — Except for the drop recorded in 2009 following the financial crisis, the value of European Union (EU) imports of goods from China has significantly increased over the last decade, from €129.2 bn in 2004 to a peak of €302.5 bn in 2014. Exports, which did not decline in 2009, have more than tripled over the period 2004-2014 to hit €164.7 bn last year. The EU trade deficit with China, continuous during the whole period, decreased between 2010 and 2013, before growing again in 2014 to -€137.7 bn.

China is the second most important EU trading partner behind the United States, accounting for 14% of total extra- EU trade in goods in 2014 (compared with 9% in 2004). Over this 10-year time period, the share of China in extra- EU imports increased from 12.6% in 2004 to 18.0% in 2014, and its share in exports almost doubled (5.1% in 2004 vs. 9.7% in 2014), according to EU.

Manufactured goods dominate both imports and exports

EU trade in goods with China is clearly dominated by manufactured goods, which accounted in 2014 for 97% of total EU imports from China and 86% of EU exports to China. The €152.0 bn deficit recorded by the EU for its trade in manufactured goods with China is only partially offset by a small EU surplus in primary goods (+€9.5 bn), in particular for raw materials (+€6.3 bn).

Germany and Finland, only EU Member States recording a surplus in goods with China

Among the EU Member States, Germany (€75.0 bn or 46% of EU exports of goods to China) was by far the largest exporter to China in 2014, followed at a distance by the United Kingdom (€19.6 bn or 12%), France (€16.2 bn or 10%) and Italy (€10.5 bn or 6%). Compared with 2013, exports to China increased in each of these four largest partners. At EU level, exports of goods to China grew by 11% in 2014.

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Germany (€60.9 bn or 20% of EU imports of goods from China) was also the largest importer from China in 2014, ahead of the Netherlands2 (€57.3 bn or 19%), the United Kingdom (€45.8 bn or 15%), France (€25.4 bn or 8%) and Italy (€25.1 bn or 8%). Among these top EU importers from China, imports increased in all in 2014. EU imports of goods from China rose by 8% in 2014.

Every EU Member State recorded a deficit in trade in goods with China in 2014, except Germany (+€14.1 bn €) and Finland (+€0.7 bn). The largest deficits were observed in the Netherlands2 (-€48.8 bn), the United Kingdom (-€26.2 bn), Italy (-€14.6 bn), Spain (-€12.4 bn), France (-€9.2 bn) and Poland (-€8.9 bn).

Growing surplus in EU trade in services with China

EU exports of services to China jumped by 27% between 2012 and 2014, from €25.1 bn to €31.7 bn, while imports increased more moderately, from €20.0 bn in 2012 to €22.6 bn in 2014. As a result, the EU surplus in trade in services with China grew by €4.0 bn over the last three years, from €5.1 bn in 2012 to €9.2 bn in 2014. This surplus was mainly due to surpluses in travel services (+€3.3 bn), charges for the use of intellectual property (+€3.1 bn) and as well as telecommunications, computer and information services (+€2.5 bn). The most significant deficit was registered for transport services (-€1.7 bn). China accounted in 2014 for around 4% of total extra-EU trade in services, representing the third most important EU partner behind the United States and Switzerland.

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China net investor in the EU in 2014

Although fluctuating from one year to the next, Foreign Direct Investment (FDI) flows between the EU and China have continuously been positive over the last four years. In 2014, EU investment in China however decreased to €9.1 bn, while Chinese investment flows into the EU rose to reach €12.1 bn, meaning that China was a net investor in the EU last year.

 

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