EU China trade: If I say China, you would probably think that this is about the India-China relationship and its possible outcomes. Indeed! It is true that India faces serious and seemingly endless issues with China. However, it is a fact that every country must solve its own problems, as is evident in the ongoing war between Russia and Ukraine. Although Western countries are providing support to Ukraine, none have provided military support, despite previous expectations.
So, what this basically means is that while dealing with China, India needs to look at its interests and try to decouple at its pace. But, until another country’s problems are not escalated, how can Europe showcase its relevance? And why talk about only India? In reality, Europe makes no contribution to the world. It has only deteriorated the conditions wherever it entered.
Currently, it is focusing on India. To appease it, Europe is using China as a bait. And so it becomes obvious to analyse the reality of its words and deeds.
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The European Union supports India in a friendly gesture
In 2018, French President Emmanuel Macron visited India and met with Prime Minister Narendra Modi. His visit was considered for the discussions that were centred around the Indo-Pacific. France considers India an important player in the region.
Similarly, Germany too looks towards India when it comes to the Indo-Pacific. German Foreign Minister Annalena Baerbock’s visit to India, last December, further set the tone of the forthcoming visit when she said, “India will have a decisive influence in shaping the international order in the 21st century, especially in the Indo-Pacific.”
Europe supported India during the Galwan clashes. The European Union as a whole was outspoken about it, and China was singled out for criticism. For instance, the French Defense Minister, Florence Parley, extended support to India in a letter to Indian Defense Minister Rajnath Singh. Parley recalled that France is India’s strategic partner in the region and reiterated solidarity. For the UNSC too, the European countries have shown solidarity with India, where China is resisting India’s membership.
Similarly, after China approached India to join its BRI and India declined, the G-7 approached India to join its anti-Chinese BRI initiative. But the European Union had its own plans. It introduced Global Gateway to counter Chinese influence and approached India and Japan to join. So, one thing becomes clear: Europe considers India a key partner and wants to bolster ties to the next level. Supporting India is definitely a good gesture, but the trade reality is just the opposite.
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EU trade with China
Europe’s (EU) trade relations with China more clearly demonstrate its stance on China. According to Eurostat, the trade between Europe and China has been increasing continuously since 2011. EU exports to China totaled $14.9 billion in March 2020. It was the lowest because of the pandemic. But in the later part of the year, it continuously grew. It was € 17.9 billion in December 2021.
When it comes to Chinese imports, they fell to €24.7 billion in March 2020. But after the world moved towards stability from the pandemic, it bounced back to €47.9 billion in December 2021. The imports surged at a whopping rate of 94 percent.
From January 2020 to December 2021, the EU’s imports from China increased by 55.2 percent. Leaving China and intra-EU trade aside, the EU’s imports from other countries increased at a rate of 18.6 percent. This is almost three times less than that of China.
Similarly, EU exports to China surged by 9.9 percent, while those to other non-EU countries increased by only 4.4 percent. This clearly shows that the EU prefers China over other countries when it comes to trade.
Apart from that, it was in 2021 that China became the third-largest trading partner of the EU. If we consider only imports, China was the biggest import destination for the EU. 22.4% of the EU’s imports were from China. This can be loosely interpreted to mean that China exported almost a quarter of the EU’s import needs. During the same time period, exports increased by 10.2 percent.
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But you may say that this is a single-year trend, and it will hardly provide a clearer picture. So let’s understand EU-China trade of past 10 years. Talking specifically about a span of 10 years between 2011 and 2021, the EU’s exports to China during this period jumped to almost 75 percent.
While the EU exported €127 billion in 2011, it expects to export €223 billion by 2021. The graph of imports also increased during this period. Imports from China were approximately € 250 billion in 2011, then fell to € 239 billion before reaching the height of € 472 billion in 2012.
So it becomes clear that EU trade with China is thriving, and the EU is not showing reluctance when it comes to trade with China. But it is not a very good signal for the EU as the trade deficit is also widening at a double-digit rate. The trade deficit increased from €129 billion in 2011 to €249 billion in 2021.
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China is increasing its exports where it had a deficit
If we categorically analyse the trade between them, China’s exports to the EU dominate the Chinese imports from the EU. The chemical exports to China, which were higher than imported chemicals, are now witnessing opposite trends. In 2021, chemical imports from China will surpass chemical exports.
The same is true in the energy sector, where exports to China are declining while imports from China are increasing. Now you may say that it is because of the Russian war and the subsequent supply shortages in Europe. But it is never considered wise to shift dependence to another hostile country that supports the previous one.
Although the EU is a political organisation, individual countries, especially big ones like France and Germany, play a crucial role in trade and political decisions. So, country-wise analysis is yet another aspect of EU-China trade. As of 2021, the three largest importers from China into the EU were the Netherlands (€ 110 420 million), Germany (€ 98 031 million), and France (€ 40 744 million). These three countries also dominate exports to China.
It becomes obvious that the EU is seeing China as a necessity. And there’s nothing wrong with that unless they start preaching to other people. But if you think that these statistics are valid until 2021 and that things have changed after the Russia-Ukraine war, let me quote the Chinese government mouthpiece, Global Times. According to a Global Times report, from January 2022 to November 2022, EU-China trade surged 4.4 percent.
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“Double stand” on Russia
The trade trends with Russia are similar too. Because of the need in the west, European countries want India to go up against Russia. On the contrary, they have maintained a suitable trade relationship with Russia. So far, only the coal trade has been lowered to almost zero, but it is not a big deal as the requirement for coal was easily shifted.
The interesting part is that, while Russian imports of petroleum and natural gas have been reduced, they still account for a significant portion of the EU’s requirements. The earlier share of Russian imports was 36 percent, which is currently 18 percent in Q3 of 2022. Petroleum imports were also 25%, which will fall to 15% in the third quarter of 2022.
But it is not that they are lowering trade in every commodity. Nickel, which is used in many industries including metal and automobiles, has seen a rise in imports. Previously, Russia accounted for 42 percent of nickel imports; now, it accounts for 43 percent.
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Are they not financing China against India?
Increasing trade with any country or at least sustaining it depends completely on the choice of the sovereign nation. There is nothing wrong with it. But the problem with the European Union is that they craft policies and make decisions based on their own interests and the needs of their own citizens. At that very moment, they do not even have an idea of what another country suffers. They are continuously increasing their trade with China while knowing that the Dragon is promoting its filthy tactics against India using its economic capacity.
This reminds me of the question that was asked to the Indian Minister of External Affairs, Dr. S. Jaishankar, during his visit to Europe. Dealing in oil, he was blamed for financing the war. Now it becomes important to ask the same question to the European Union: are they not financing China’s aggression against India?
This is the murky politics that is circling India around the world. The positive aspects of India, such as its large workforce, larger market, enormous entrepreneurial opportunities, strong economic condition, and characteristics that serve as a counter to China in the region, are making the world eager to ally with India. Whether it is the Indo-Pacific or the Pacific, China or Russia, India must make independent decisions and work in accordance with the needs of its people.
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