N. Peter Kramer’s Weekly Column
Eurostat, the EU official statistic office, found that the EU’s trade deficit with China slid 27% in 2023, to €291 billion down from €397 billion in 2022. Export declined by 3% to €223 billion while import fell 18% to €514billion.
The sharp reduction in the EU’s trade deficit with China in 2023 seems to be less the effect of Von der Leyen’s ‘de-risking’ policy from China but more that Beijing is seeking strategic independence from the West.
Experts mentioned that China is less importing from the EU because they are substituting these imports. After special measures, China is more and more capable of building goods on its own.
A rising tension between the US/EU and China is caused by China’s support for Russia in its war with Ukraine. The EU banned exports to Chinese firms that are suspected of supplying Russia with weapons and also announced its Economic Security Package for enhanced export controls for goods with dual (civilian and military) potential. Measures clearly to be directed against China.
The big export boom for the EU, and particularly for Germany, over the last decades was very much fuelled by China importing investment goods and machinery. The decline in exports to China poses a huge risk to Germany’s continued prosperity, according to Brussels-based think-tank Bruegel: ‘We should worry especially about Germany. We should basically more than worry. We should do something about it’.
But what?
