China is now the EU’s number one trading partner, having overtaken the US in 2020.
Trade with most of Europe’s major partners declined due to the Covid-19 pandemic but China was able to defy that trend.
Trade between China and the EU was worth over US$700 billion last year, compared with US$670 billion worth of imports and exports from the US.
Although China’s economy went through a bad patch in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods.
China was the only major global economy to see growth in 2020, stoking demand for European cars and luxury goods.
Meanwhile, China’s exports to Europe benefited from strong demand for medical equipment and electronics.
Eurostat, the EU’s statistical office, said, “In the year 2020, China was the main partner for the EU. This result was due to imports increasing by 5.6% and exports by 2.2%.
The figures were similar to China’s official data published in January, which showed trade with the EU grew by 5.3% in 2020.
The EU’s trade deficit with China also grew from US$199 billion to US$219 billion according to Eurostat figures released on Monday.
Although the US and the UK remain the EU’s largest export markets, trade with both countries dropped significantly, the statistics showed.
Analysts say trade with the UK is going through post-Brexit teething problems as new bureaucratic regulations are worked through but trade is expected to pick up significantly this year.
Transatlantic trade has been hit by a series of tit-for-tat disputes that have resulted in tariffs on steel and products such as French Cognac or American Harley-Davidson motorcycles.
In 2020, the US had a trade volume of US$671 billion with the EU, down from US$746 billion the previous year.
It’s not year clear if new US President Joe Biden will re-evaluate the US approach to trade with Europe.
The EU and China, however, are trying to deepen their economic ties, with both sides seeking to ratify an investment deal that would give European companies better access to the Chinese market.
Analysts are tipping global trade to turn around in 2021 after a lacklustre 2020.