China is now the EU’s biggest trading partner, overtaking the US in 2020. China bucked a wider trend, as trade with most of Europe’s major partners dipped due to the Covid-19 pandemic.
Trade between China and the EU was worth $709bn (€586bn, £511bn) last year, compared with $671bn worth of imports and exports from the US.
Although China’s economy cratered in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods.
China was the only major global economy to see growth in 2020, stoking demand for European cars and luxury goods.
Meanwhile, China’s exports to Europe benefited from strong demand for medical equipment and electronics.
“In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (+5.6%) and exports (+2.2%),” according to Eurostat, the EU’s statistical office.
The figures were similar to China’s official data published in January, which showed trade with the EU grew by 5.3% to $696.4bn in 2020.
The EU’s trade deficit with China also grew from $199bn to $219bn according to Eurostat figures, which were released on Monday.
Trade with US and UK slumps
Although the US and the UK remain the EU’s largest export markets, trade with both countries dropped significantly, the statistics showed.
“Trade with the United States recorded a significant drop in both imports (-13.2%) and exports (-8.2%),” the data agency said.
Transatlantic trade has been hit by a series of tit-for-tat disputes that have resulted in tariffs on steel and products such as French Cognac or American Harley-Davidson motorcycles.
In 2020, the US had a trade volume of $671bn with the EU, down from $746bn the previous year.
It’s not year clear if new US President Joe Biden will re-evaluate the US approach to trade with Europe.
The EU and China, however, are trying to deepen their economic ties, with both sides seeking to ratify an investment deal that would give European companies better access to the Chinese market.
Analysts are tipping global trade to turn around in 2021 after a lacklustre 2020.
The real value of global trade is set to rise by 7.6% after an an estimated contraction of 13.5% in 2020 to $16.4tn, according to research firm IHS Markit.
Source: bbc.com
