The EU’s trade deficit with China has been growing for years and, thanks to the efforts of the prosperity and trade hating left and the save-the-planet-by-destroying-civilisation mob recently reached a record €1bn (£0.8bn) a day, according to EU official trade data. This has fuelledconcerns over the future of Europe’s “industrial backbone”.
The gap between the EU’s imports from China and exports to China amounted to €31.9bn in April, according to the latest import and export data from the EU statistics body Eurostat.
The data comes as European leaders prepare to meet on Thursday to discuss measures to address the growing trade imbalance, which includes the increased presence of Chinese electric cars – exported by a heavily subsidised industry – in Europe and the use of everyday components in factories across the bloc.
On receiving the news Javi López, European Parliament vice-president, said the European Union's trade imbalance with China "cannot continue", with the bloc running a €1bn-a-day trade deficit.
After travelling to China this week seeking to end the eight-year stalemate in negotiations with The Peoples Republic to find a way of resolving this trade imbalance, López (S&D, Spain) called for the EU to "relaunch" its relationship with Beijing. He believes dialogue, rather than defensive tariffs and restrictions, is key to rebuilding ties with the Chinese government
The Spanish MEP says solutions based on "dialogue and cooperation", rather than by triggering a trade war between the EU and China should be found, and he expects the European Commission's efforts to begin easing tensions will soon result in progress.
Senor Lopez is sadly out of touch with reality if he thinks the economically devastating trade imbalance between EU and China can be resolved through diplomatic negotiations. That is just not how the Chinese Communist Party do things.
The EU’s trade deficit with China is exploding year in year due to Europe - wide (including UK which is no longer and EU member but plays by the same rules,), and the EU’s heads of state and government, having exported whole industries, and the jobs that go with them, to China, India and the global south while simultaneously crippling what industries remain in the west with high taxes and exorbitant fuel costs in pursuit of virtue signalling policies like 'Net Zero' are beginning to panic. China and other developing economies pay lip service to net zero and other sacred cows but happily go on increasing CO2 emisssions and damaging the environment regardless.
China’s exports to the EU have risen by 16 per cent in the 2024 - 25 financial year ( Financial Times ) and look set to rise by a similar amount in the current year. The deficit between what we buy from China and what we sell to them now amounts to €1 billion per day. This is not something any European economy can sustain over a prolonged period, particularly will all major European economies being burdened with debt as a result of overly generous welfare systems. A trade war with China is looking increasingly inevitable.
The leader of the EPP Group in the European Parliament, social democrat Manfred Weber, is uncharacteristically blunt in his assessment. Weber told the German newspaper Bild
‘Either we defend ourselves, or China will destroy much of our industry.’
Weber is right on target there, China's heavily subsidies automobile manufacturers are already causing Europe's main car makers to reduce production and cut jobs, as our recent report on Vlokswagen demonstrated.
The European market is now being flooded with cheap Chinese goods after China’s trade war with Trump and the United States put a stop to much of its exports there. A thorn in the EU’s side is China’s extensive state support for various industries. This gives Chinese companies an unfair advantage as EU and World Trade Organisation approaches to subsidies are governed by the Agreement on Subsidies and Countervailing Measures (SCM Agreement), which restricts the use of subsidies and allows member countries to impose countervailing measures if they can demonstrate injury to a domestic industry from subsidised imports.
The EU is accustomed to treading softly in relation to China, and President Antonio Costa did not even mention China in responding to Lopez in the trade deficit issue.
Beijing is aware of European dissatisfaction with the situation and has launched a campaign to prevent the EU from adopting new measures to slow Chinese imports. Earlier this month China cancelled two important diplomatic meetings with the EU at short notice, according to the FT.
Beijing is said to be particularly dissatisfied with the EU’s new industrial legislation and the ‘Buy European’ decision. EU diplomats, for their part, are clear that ‘macroeconomic imbalances’ is synonymous with China.
‘Of course it is China we are talking about,’ say two senior diplomats.
They believe that the EU must sharpen its trade policy instruments to meet what they regard as unfair competition from China, but reject the suggestion that this amounts to provoking conflict.
‘This is a reaction. It was they who started it,’ says one of the diplomats.
If the EU prioritises internal compromise, it will end up suffering defeat at the hands of China, which is paying close attention and knows where to apply pressure.
FROM THE ARCHIVE:
No comments:
Post a Comment