The latest figures released by Eurostat show that the EU’s trade with China grew significantly in 2020 due to the Epidemic, with its bilateral trade reaching €586 billion, surpassing the €555 billion between the EU and the US, thus making China the EU’s largest trading partner for the first Time.
Last year, the EU’s exports to China grew by 2.2% and imports from China increased by 5.6%. At the same time, the EU’s exports to the U.S. fell by 8.2 percent and imports from the U.S. decreased by 13.2 percent.
An ING German economist Carsten Brzeski was quoted in a Tuesday (Feb. 16) report by business television station CNBC as saying, “The reason behind this is clear: China and Asia are the only parts of the world that have seen a strong economic recovery after the outbreak.”
Going into the winter, China, like many European countries, experienced a rebound from the epidemic and reintroduced large and strict social restrictions, which can have some impact on economic growth. However, Europe and the U.S. are making significant gains in vaccinating against the new coronavirus (CCA virus). Economic forecasters are optimistic about the economic recovery in Europe and the United States this year.
Brzezinski noted that the importance of China’s trade with Europe clearly makes European countries face “a difficult choice”: whether to do trade with China or to stand with the United States in terms of technology.
The U.S. and Europe have clashed with Beijing over the construction of 5G networks and technology transfer. Beijing is demanding that foreign companies trade technology for markets. Meanwhile, Washington and Brussels are concerned about the human rights situation in China.
Observers point out that this situation of both cooperation and confrontation between Europe and the United States and China is fraught with uncertainty in the coming period. Widespread human rights problems in Xinjiang, Tibet, Hong Kong and mainland China are becoming more acute, and confrontations are heating up. The Chinese Communist Party‘s threat of force against Taiwan and its intention to reunify with China are also forcing Europe and the United States to make a final choice. A confrontation between the two sides on this issue that gets out of hand could have disastrous effects on bilateral economic cooperation.
Brzeski said, “The risk is that compromising and balancing between the two will affect future growth.”
However, the EU appears to be opting for stronger economic ties with China. The two sides reached a bilateral investment agreement late last year that cleared the way for European companies to enter the Chinese market.
Valdis Dombrovskis, the EU’s new trade commissioner, said as Eurostat released its latest trade figures, “The current crisis gives us no choice but to work together with our global trading partners, which includes China.”
In a statement, Dombrowski said, “Together we can achieve a faster economic recovery and make progress in areas of mutual interest, such as trade and investment relations.”
The EU-China investment agreement also needs to be approved by EU national legislatures. Many EU lawmakers are critical of the Chinese government, and the agreement faces significant resistance to passing approval.
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