Friday

28th Jul 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 and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  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.

Analysis

Visegrad lobby makes food quality an EU issue

Fico convinced the EU commission chief to take action in the perceived problem of discriminatory food practices, even though the evidence for the phenomenon is anecdotal.

News in Brief

  1. Werner Hoyer re-appointed as EU investment bank chief
  2. Spanish PM denies knowledge of party corruption
  3. France 'routinely' abuses migrants, says NGO
  4. Swedish government rocked by data scandal
  5. Member states relocate 3,000 migrants in June
  6. Top EU jurist says Malta's finch-trapping against EU law
  7. EU judges rule to keep Hamas funds frozen
  8. EU court rejects passenger data deal with Canada

Stakeholders' Highlights

  1. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  2. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  3. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  4. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  5. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  6. ACCAAnnounces Belt & Road Research at Shanghai Conference
  7. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  8. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  9. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  10. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  11. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  12. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug

Latest News

  1. Corbyn re-opens Labour's single market wound
  2. Visegrad lobby makes food quality an EU issue
  3. EU court could dismiss national borders in cyberspace
  4. Confusion swirls around Macron's Libya 'hotspots'
  5. Insults fly after EU ultimatum to Poland
  6. UK requests EU migration study, 13 months after Brexit vote
  7. EU defends airline data-sharing after court ruling
  8. Stop blaming Trump for Poland’s democratic crisis