EU: 2015 trade deficit with China booms by more than €40 billion to record high
/Brussels, 22.10.2015 - As the trade deficit between the EU and China is going to reach an all-time record high of about €180 billion, EU manufacturing industry alliance AEGIS Europe warns of dramatic trade imbalance.
According to recent trade figures published by Eurostat, in the first seven months of this year the European trade deficit with China increased more than ever. Following that trend it will reach more than €180 billion end of 2015. European manufacturers said the Eurostat data sends a strong warning about the ever-growing imbalance in trade relations with China.
The manufacturing industry initiative, AEGIS Europe, which brings together 30 European industry associations, points to a clear cause for this: increasing subsidies to Chinese enterprises, and support for overcapacities, from the Chinese government. “Europe’s partnership with China is not balanced. China, as a planned economy, subsidises its industry to the tune of billions of euros and massively underwrites financing of Chinese exports. Meanwhile, in Europe whole industries are disappearing,” explained Milan Nitzschke, spokesperson for AEGIS Europe.
The EU’s trade deficit with China has increased steadily year-on-year. In 2015 imports from China to Europe will reach double those from the EU to China. The Eurostat trade data indicates that the gap between imports and exports in 2015 is going to increase by approximately €45 billion or more than 30 percent over last year.
“China dominates through government-subsidised dumping prices large parts of the EU market,” said Mr Nitzschke, adding, “The consequence is a lack of competition and the loss of thousands of jobs in Europe.”
On the occasion of the current state visit by Chinese President Jingping Xi, the European manufacturing industry warned against political naïveté in Europe. “Britain’s energy and finance sector deals with China should not obscure the fact that China is pursuing a clear course of expansion in Europe. China does not respect basic rules of the market economy. Diplomacy is important but it must also include honesty. The EU must make clear that it requires China to be in compliance with international trade rules,” said Mr Nitzschke.
AEGIS Europe criticised considerations in political circles in Brussels to follow China’s request to get so-called ‘Market Economy Status’ in trade law. The EU would consequently abandon any option to take effective action against illegal dumping in Europe. A recently published study by the Washington Economic Policy Institute estimates that up to 3.5 million EU-jobs would be in danger of disappearing. “Given the growing trade deficit, it is ill-considered to cut instruments that exist to address unfair competition from Chinese companies. Free trade only works with fair rules applied to and complied with by all,” concluded Mr Nitzschke.
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