China is now the largest trading partner of the EU, overtaking the United States in 2020.
As trade with most of Europe’s major partners dipped due to the Covid-19 pandemic, China bucked a wider trend.
Last year, trade between China and the EU was worth $709 billion (€586 billion, £511 billion), compared to $671 billion in imports and exports from the US.
Although the pandemic caused China’s economy to collapse in the first quarter, its economic growth later in the year fueled demand for EU products.
China was the only big global economy that saw growth in 2020, raising demand for European automobiles and luxury goods.
China’s exports to Europe, meanwhile, have benefited from strong demand for medical equipment and electronics.
“In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (+5.6%) and exports (+2.2%),” according to Eurostat, the EU’s statistical office.
The figures were identical to the official statistics from China released in January, which showed that trade with the EU increased by 5.3% to $696.4 billion in 2020.
According to Eurostat figures released on Monday, the EU’s trade deficit with China also increased from $199 billion to $219 billion.
While the United States and the United Kingdom remain the largest export markets in the EU, trade with both countries fell dramatically, the statistics showed.
“Trade with the United States recorded a significant drop in both imports (-13.2%) and exports (-8.2%),” the data agency said.
A series of tit-for-tat conflicts that have led to tariffs on steel and goods such as French Cognac or American Harley-Davidson motorcycles have influenced transatlantic trade.
The US had a $671bn trade volume with the EU in 2020, down from $746bn the previous year.
It’s not a straightforward year for new US President Joe Biden to re-evaluate the US approach to Europe’s trade.
However, the EU and China are looking to strengthen their economic relations, with both sides seeking to ratify an investment agreement that would provide greater access to the Chinese market for European companies.
After a lackluster 2020, experts are urging global trade to turn around in 2021.
According to research firm IHS Markit, the real value of global trade is expected to grow by 7.6 percent after a projected contraction of 13.5 percent in 2020 to $16.4tn.