Opinion

By blaming China for its trade deficit, EU is barking up the wrong tree

Instead of complaining about the lack of access to China’s market, Brussels should raise its own productivity

It should also rethink the many ways it is stoking bilateral tension while reducing trade, including through a tough export control regime, suspension of a bilateral investment deal, and probes into Chinese industries

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Zhou Xiaoming is a senior fellow at the Centre for China and Globalisation in Beijing and a former deputy representative of China’s Permanent Mission to the United Nations Office in Geneva.

Published: 8:30pm, 23 Oct 2023

These days, complaining about the European Union’s trade deficit with China seems a fashionable thing to do in Brussels. China is the EU’s second-largest trading partner after the US, and bilateral trade hit an all-time high of US$847.3 billion in 2022. The same year, China had a record trade surplus of US$276.6 billion.

Brussels attributes this “trade imbalance” to the lack of access to China’s market. EU trade commissioner Valdis Dombrovskis criticised China’s level of openness as not being “the same as the level of openness from the EU side”. Meanwhile, the bloc’s chief diplomat Josep Borrell said China’s trade surplus with Europe had more to do with poor market access than productivity issues or a greater competitive advantage.

While the EU’s concern over its massive trade deficit is understandable, it is overlooking the fundamental causes.

The fact is, China’s trade surplus is the result of the interplay of market forces. It is, first of all, partially due to the country’s manufacturing prowess. This is true not just of Europe, but also the rest of the world.