EU’s Unsustainable €1bn-a-day trade gap with China

  

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 unsustainable trade gap with China has fuelled concerns 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.

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Scottish Wind Farm Paid More For Not Supplying Energy Than For Energy It Feeds Into The National Grid.

 

A story which broke this week in mainstream media revealed a British wind farm owned by France’s state energy company is being paid to throw away half the power it generates. The Dorenell onshore wind farm in Scotland, owned by EDF, had 50pc of its output “curtailed” in 2024 because the UK’s national grid was too congested to accept it.

However the project was still paid for the electricity that wasn’t used, leading to revenues of nearly £68m in the year, newly published accounts show. This has long been one of the complaints of 'clean green energy' sceptics. Beacuse of the intermittent nature of 'sustainable' energy sources the potential output of all wind farms must far exceed the highest levels of demand. Thus when conditions are favourable some wind generators must be decoupled from the national grid in order that the transformers and load balancing equipment will not be overwhelmed and fail. This is exactly what happened in Spain earlier this year, when grid equipment wrecked by overloads failed, causing a blaxkout lasting several days over a large part of the country.

Around £40m of the revenue earned for EDF by the Dornell wind farm last year came from payments to curtail its output, according to separate disclosures made by EDF in a court dispute.

The payments, which are ultimately incorporated in the cost of electricity to households and businesses, are an example of the grid balancing costs that were blamed this week for driving up domestic energy bills.

Ofgem, the industry regulator, said these types of costs were responsible for around £15 of a £35 increase to the energy price cap due to take effect in October, and dealt a major blow to Ed Miliband’s promise to lower bills by £300 per year and prompted questions about the hugely generous government subsidies handed to wind farms.

Constraint payments occur because most of Britain’s wind farms are located in Scotland and often generate far more electricity than can be used locally.

At the same time, the power network lacks capacity to store all the excess power or to transport it south, where most demand is located. This means grid operators often resort to curtailing the output of wind farms to keep the system balanced.

Renewable subsidies also incentivise wind farms to try to export power. In Dorenell’s case, accounts show the onshore wind farm was paid for 591,164 megawatt hours (MWh) of power in 2024. Only 297,137 MWh of this was actually exported – suggesting 294,027 MWh, or 49pc, was curtailed.

The wind farm has a CfD with an inflation-linked strike price of £82.50 per MWh in 2012 prices, worth about £112 per MWh in current prices.

Sam Taylor, who runs Scottish based UK Unionis think tank These Islands, said the huge amount of curtailment meant Dorenell was effectively paid £227 per MWh for the electricity it actually supplied to the grid last year.

If you're thinking the whole things sounds like economic insanity, you are not the only one,.in what way can being paid not to produce ever be justifiable? Producing to squeeze the proverbial quart into the pint pot was a nonsensical decision at the planning stage driven by dogma rather than need. Dishonesty is the least of it, basic IQ is lacking, verging on malpractice in government which can only by rectified by undoing of these bankrupting policies and payments and the removal of those in charge of this mess, from PM down.

Renewable energy should be self supporting, the subsidies we paying are basically another form of taxation to implement a policy that is looking increasingly unrealistic and imposdible to implement. There is little point in the UK reducing its C02 emissions beyond the 50% we have already achieved when globally these emissions have risen by 60% since we enacted the Climate Change Act.

The necessary changes to the grid and infrastructure to accommodate renewables are forecast to peak at £ 8 billion per year by 2030. We are being lied to and our energy bills will keep increasing, estroying in the process more British businesses and jobs as we become less and less able to compete in world markets

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