The background to the Brussels summit between EU and Chinese leaders is Europe’s increasing focus on Asia – and particularly China – as a destination for its goods and a source of investment.
A critical driver of growth, exports are one of few bright spots in the struggling European economy.
Trade between the EU and China rose to 428 euros last year and Chinese companies are increasingly investing in Europe
Between 2000 and 2008, Europe’s imports from China rose from around 75 billion euros worth to 248 billion euros. The financial crisis pushed imports down to 214 billion euros in 2009, before they bounced back last year to 293 billion.
Europe is still China’s main export market, but with much of the region in recession and austerity the order of the day, Europeans are buying less. As a result in the first half of this year, Chinese exports to Europe fell by five percent while the volume of European goods sold to China rose by three percent.
That makes China’s market of 500 million people vital to the European Union.
The game is changing for China also as its labour costs rise, eroding one of the main advantages its manufacturers have enjoyed.
In addition, raw materials costs are going up and China’s currency – the yuan – is appreciating in value against the euro.