Amid NATO warning, a look at increasing China-EU trade ties

On Thursday, NATO secretary general Jens Stoltenberg warned of the security consequences of engaging with authoritarian powers such as China. Speaking at the Berlin Security Conference, Stoltenberg said the war in Ukraine and reliance on Russian gas should lead to an assessment of dependencies on authoritarian states.

This statement from the world’s most powerful military alliance is significant, given China’s expansionist policies in the form of ever-increasing military build-up and engulfing smaller countries in debt traps. Economic sanctions on Moscow by the entire West have failed to curb Russian advances in Ukraine, and serves as a lesson with regards to China which bases its military might on its economic clout.

In 2020, China was the largest exporter and second largest importer in the world – its trade mostly propelled by European countries. The total value of goods trade between China and Europe hit €696 bn last year, up nearly a quarter from 2019.

In 2021, China was the third largest destination for EU goods exports, accounting for 10.2 per cent of the total, according to Eurostat data. It was also Europe’s biggest source of imports, accounting for 22.4 per cent of the total. Among EU member states, Netherlands was the largest importer of goods from China, and Germany the largest exporter of goods to the country.
 
 

In 2021, the most exported goods from EU were machinery & vehicles (52 per cent) and chemicals (15 per cent). The most imported goods were also in the same categories – machinery & vehicles (56 per cent) and chemicals (7 per cent). The most traded group of goods was telecommunications equipment, followed by data processing machinery and motor vehicles.

The three largest importers from China in the EU were Netherlands (€110,420 million), Germany (€98, 031 million) and France (€40,744 million). At 39.4 per cent, Czechia had the highest share for China in its extra-EU imports.

 
On the other hand, the three largest exporters to China in the EU were Germany (€104,655 million), France (€24,028 million) and Netherlands (€ 15,906 million). At 16.5 per cent, Germany had the highest share for China in its extra-EU exports.

However, Europe’s relations with China have soured of late due to the Covid-19 pandemic (which many blame on Beijing); and Xi siding with Russia in the Ukraine conflict, followed by tit-for-tat sanctions between China and EU. On the other hand, the United States, which imposed controls on semiconductor exports to China, is also pressuring Europe to adopt a similar line.