With the pandemic greatly shaping the global economy, China has emerged as Europe’s top trading partner for the first time, overtaking the United States, according to the European Statistics Office .
Attributable to China’s V-shaped recovery from the pandemic, the trade between China and the EU was worth $709 billion in 2020 as compared with the $671 billion worth of imports and exports from the US. Analysis by Eurostat affirms that China was the main trading partner for the European Union in 2020 due to the 5.6% increase in imports and the 2.2% increase in exports, in comparison with the trade with the United States which illustrated a decrease in imports of 13.2% and decrease of 8.2% in exports. Attributable to the purchase made by the EU on large quantities of pharmaceuticals and medical equipment from China, it demonstrated an increase in imports from China, while China’s recovery with the pandemic further drove sales of European products, especially with regards to the automobile and luxury goods sectors.
As the trend is expected to continue in the first half of 2021, trade between China and the EU is likely to further expand, as both sides have concluded negotiations to sign an investment deal (Comprehensive Agreement on Investment) which allows their respective companies greater access to each other’s markets. The agreement aforesaid has yet to be ratified by the European Parliament and approved by the European Council as it is amidst political opposition. As China is forecasted to achieve the second-highest growth rate in 2021 according to the International Monetary Fund, pulling together may allow for the economic situation to recover quicker and more efficiently while progressing on trade and investment relations, it will be vital to further pursue the developments on this matter as the EU strives to push for more strategic autonomy and less dependence.
Credits to: Chantelle Lee