Monday

25th Jul 2016

Focus

EU-China trade relations 'distorted,' MEPs say

  • China's trade surplus with the EU was €168.8 billion in 2010. (Photo: dolmansaxlil)

The European Parliament adopted a non-legislative resolution on the imbalance of trade relations between the EU and China on Wednesday (23 May).

The imbalance, claims the report drafted by Liberal MEP Marielle de Sarnez, is due primarily to barriers placed upon European firms wanting to enter the Chinese market. China's trade surplus with the EU was €168.8 billion in 2010.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

“We have to protect EU businesses from problems such as trade barriers, counterfeiting and monetary dumping,” said Sarnez.

Complex regulations and lack of transparency make it nearly impossible for EU companies to participate in Chinese public procurement, her study says.

The non-respect of intellectual property rights also acts as a deterrent to foreign investors. The US Senate on Tuesday announced, for instance, that more than a million fake electronic parts from China have been found in US military aircraft.

Tensions are also flaring up on China’s quasi-monopoly on rare earths, essential to the European high-tech sector. The country has corned some 97 percent of the world’s rare earth production.

A report by the EU chamber of commerce in China found 43 percent of all foreign-based managers in China suffer from discrimination, up from 33 percent compared to 2010.

The chamber’s findings suggest China’s measures imposing further restrictions on opening markets “cast doubt on the determination to create lasting opportunities for all market players."

The EU exported €136.2 billion in goods to China in 2011, a 20 percent increase compared to 2010. For its part, China sent €292.1 billion of goods to Europe in 2011.

The trade deficit between the two has more than tripled in the last ten years and has caused concern among the European Commission. The EU had 55 anti-dumping measures and one anti-subsidy measure in force against Chinese imports in 2011 alone.

The Chinese yuan, says Sarnez' report, is also undervalued and non-convertible and borders “on monetary dumping on an unmatched scale”. Consequently, China has accumulated some €2.5 trillion in foreign exchange reserves and is now buying up some EU sovereign debt.

The EU is also unable to determine how deeply China has penetrated member states economies “be it in terms of investment or in terms of purchases of sovereign debt securities."

Meanwhile, the EU allocated €224 million in development assistance for China for the period 2007 to 2013. Some 200 million Chinese are still living below the poverty level.

The report, however, also acknowledges China’s grievances with Europe, citing the complex system of agricultural tariffs and EU-farm subsidies, technical barriers to trade, and restrictions imposed on foreign investments in some member states.

China’s growth was above nine percent in 2011 with some experts predicting it could become the world's largest economy within the next five to 10 years.

Some of that growth, claims the Parliament report, is built on forced labour and child labour.

Investigation

ECB in ‘bail-out’ of scandal-tainted VW

The ECB has started to “bail out” Germany’s Volkswagen Group by buying its corporate bonds, but other EU-linked banks continue to shun the scandal-tainted firm.

Stakeholders' Highlights

  1. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event Agenda for 2016
  2. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  3. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  4. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  5. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  6. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  7. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  8. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  9. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  10. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  11. Access NowEuropol Supports Encryption. We Can Relax Now… Right?
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels

Latest News

  1. Munich attack might not have been terrorism
  2. A very British (and Corbynite) coup
  3. Poland 'changing for the worse' for Muslims and refugees
  4. EU aims to lift visas on Turks despite purge
  5. ECB in ‘bail-out’ of scandal-tainted VW
  6. EU failed to learn lesson from Brexit, Poland says
  7. UK accord on EU workers 'crucial', France says
  8. EU and US take different lines on Turkey crackdown