Saturday

25th Nov 2017

Focus

China slowdown is bad news for Europe

  • "Chinese factories are filled with European equipment" (Photo: Daniel Foster)

China's economy so far this year grew slower than ever in the last three years, spelling bad news for its biggest trading partner, the European Union.

The second-biggest economy in the world grew by a mere 8.1 percent on a one-year-basis during the first quarter of 2012, the country's national statistics bureau announced on Friday (13 April), down from 8.9 percent during the last quarter of 2011 and "significantly lower than expected," Maarten-Jan Bakkum, emerging market analyst at ING, told EUobserver.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Faced with a fragile global recovery and hesitant demand, China's famously export-driven economy has been abating for several years now. Early last month, the country's leadership lowered its 2012 growth target to 7.5 percent, down from 8 percent last year.

The new numbers, however disappointing, are still high and relatively stable. By comparison, the EU's economy grew by only 1.5 percent last year and is expected not to grind to a halt this year, while the eurozone is already in recession.

For the long term, then, these figures may not be of much significance. China is widely believed to remain a strong driver of global economic growth as its billion-strong population begins to buy products on the world market.

"We believe the economy will continue to maintain a moderately steady growth in the future," Sheng Laiyun, a spokesman for the national statistics bureau, told state press agency Xinhua.

But for the short term, experts say, the numbers are bad news for Europe, whose economy is closely interlinked with that of China. They not only confirm Europe's own fragile recovery as it imports less from China, but also indicate a future withering demand for European products.

"The news is very relevant for Europe," says Bakkum. "The little amount of good news coming from Europe comes from Germany, which is highly dependent on the export to China."

Europe's main export product group are machinery and transport equipment. "All factories in China are filled with European equipment," says Bakkum. A slump in production in China, then, would result in a slump in demand from Europe.

The European Commission, for its part, refused to comment. "We don't comment every time there is a new statistic," Olivier Bailly, a commission spokesman, told reporters in Brussels.

No trade war with China, EU presidency says

Business between the EU and China is running as usual, despite highly-public trade differences between the two economic powerhouses, the Danish trade minister has said.

China urges Germany and France to solve euro-crisis

Chinese Prime Minister Wen Jiabao on Thursday offered vague promises to buy bonds from troubled euro-countries, but said that it is ultimately up to Germany and France to solve the crisis.

UK has 10 days to make Brexit progress

British prime minister Theresa May was told to make progress on the financial settlement, and Ireland, before talks can move to the next phase.

EU still giving gas projects 'fast-track' status

The European Commission published on Friday a list of projects of common interest, which receive preferential treatment. Environmental lobbyists accuse the Commission of trying to fool the public with number games.

News in Brief

  1. Merkel: Germany remains 'active' in EU
  2. Work with Israel, Egypt on gas exploration, says Commission
  3. Only seven EU states have 'advanced' stage climate plans
  4. EU dashes integration hopes of eastern countries
  5. EU approves joint Irish electricity scheme
  6. German president to launch 'Grand Coalition' talks
  7. Irish opposition 'threatens national interest', says minister
  8. SPD drops opposition to grand coalition in Germany

Stakeholders' Highlights

  1. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  2. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  3. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level
  4. European Friends of ArmeniaPresident Sargsyan Joined EuFoA Honorary Council Inaugural Meeting
  5. International Partnership for Human RightsEU Leaders Should Press Azerbaijan President to End the Detention of Critics
  6. CECEKey Stakeholders to Jointly Tackle the Skills Issue in the Construction Sector
  7. European Friends of ArmeniaLaunch of Honorary Council on the Occasion of the Eastern Partnership Summit and CEPA
  8. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  9. EPSUStudy Finds TUNED and Employers in Central Governments Most Representative
  10. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  11. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  12. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition