As important trade partners to each other, China-EU bilateral trade and economic ties enjoy strategic significance and global influence. China and the EU share a lot in common. Upholding a policy of trade alliances, the EU remains an active advocate and beneficiary of free and open trade. China is committed to reform and opening-up, actively participates in economic globalization, and remains a beneficiary and firm advocate of economic globalization and WTO rules.
In 2023, bilateral trade between China and the EU reached 783 billion US dollars, with a volume nearly 1.5 million US dollars every minute. The China-Europe Railway Express operated 17,000 trips throughout the year, transporting 1.9 million standard containers, up by 6% and 18% year-on-year respectively. Bilateral trade drove the flow of personnel, technology, and capital between China and Europe, which not only facilitated the exchange of goods and brought vitality to both economies, but also strengthened industrial development, improved productivity, and brought greater benefits to our people.
In 2022, EU's trade deficit with China was higher than before, which caused some to question the mutual benefit essence of China-EU bilateral trade. Here I would like to share some facts about it.
Firstly, 2022 witnessed an exceptionally unusual macro-economic environment. Occurrences such as the Ukraine crisis and the Covid-19 pandemic had substantial impacts on trade. Global inflation, disruptions in industrial and supply chains, and changes in domestic and international demand also explained much variation in trade. It is fair to say that EU's trade deficit with China in 2022 lacks representativeness. According to the latest data from the Eurostat, EU's trade deficit with China dropped by 27% in 2023.
Secondly, in light of the deep integration of global industrial and supply chains, trade statistics does not fully reflect the profit distribution in China-EU trade. In fact, over one-third of export from EU companies in China was sold to the EU. Although China appears to have the trade surplus, in reality, the EU has reaped considerable profits from it. Many European companies have gradually enhanced their business in China and further localized production to cater to the Chinese consumers, which has replaced part of Europe’s export to China.
As a matter of fact, trade surplus or deficit is a result under the combined influence of macro-economic environment, international trade conditions, and the industrial structures of the two sides, which should be viewed from a developmental and dialectical perspective, rather than simply attributing it to one side or the market access issues.
Over the past years, China's manufacturing sector has continuously gained competitive strength internationally. Chinese products with high quality and affordable prices have met the needs of both Europe and other markets, and have contributed to Europe’s green development. It is a natural result of market operations by companies from both sides and the international division of labor. It is also an independent choice made by consumers, which should not be artificially restricted or interfered with too much.
In practice, some countries have imposed high tariffs and trade barriers on Chinese products on the pretext of trade deficit but often backfired. Their actions only burdened their own consumers without effectively addressing trade imbalance. As to China-EU bilateral trade, the EU has long restricted the export of high-tech products to China, and usually these products are of high value. For example, the value of five ASML extreme ultra-violet lithography machines equals the total value of wine exported from the EU to China in the whole year of 2022. If the EU continues to impose export restrictions on high-tech products, it will only exacerbate trade imbalance.
China has never deliberately sought trade surplus. Instead, to address its trade partners’ concerns over trade imbalance, China has hosted the China International Import Expo for six consecutive years, which is the world’s first national-level exhibition themed on import. The Expo is also one of China’s practical actions to fulfill its commitment to opening-up. China always views China-EU cooperation from a strategic perspective. Not long ago, China lifted the ban on Belgian pork imports, agreed to lift restrictions on beef and apple imports from Germany, and granted unilateral visa-free treatment to France, Germany, Italy, Belgium, Luxembourg and many other European countries, facilitating trade and economic exchanges between China and Europe.
Looking ahead, China stands ready to import more products from the EU that align with its market demand, and hopes the EU will relax export restrictions on high-tech products to China as well, so as to jointly push for more balanced development in bilateral trade.