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China

The European Union and China are two of the biggest traders in the world. China is now the EU's second-biggest trading partner behind the United States and the EU is China's biggest trading partner.

The EU is committed to open trading relations with China. However, the EU wants to ensure that China trades fairly, respects intellectual property rights and meets its obligations as a member of the World Trade Organization (WTO).

In 2013 the EU and China launched negotiations for an Investment Agreement. The aim is to provide investors on both sides with predictable, long-term access to the EU and Chinese markets and to protect investors and their investments.

More on Investment.

Trade picture

  • China is the EU's biggest source of imports and its second-biggest export market. China and Europe trade on average over €1 billion a day
  • EU’s main imports from China are industrial and consumer goods, machinery and equipment, and footwear and clothing
  • EU main exports to China are: machinery and equipment, motor vehicles, aircraft, and chemicals
  • EU-China trade in services amounts to more than 10% of total trade in goods, and the EU's exports of services make up 19% of EU's total exports of goods

Although the EU currently has a trade deficit with China, this is compensated by European exports to other destinations; in fact the EU's overall trade balance is positive.

EU-China: Trade in goods

Trade in goods 2014-2016, € billions
Year EU imports EU exports Balance
2014 302.1 164.6 -137.5
2015 350.6 170.4 -180.3
2016 344.6 170.1 -174.5

EU-China: Trade in services

Trade in services 2013-2015, € billions
Year EU imports EU exports Balance
2013 21.0 27.5 6.4
2014 22.9 29.6 6.8
2015 26.4 37.3 10.9

EU-China: Foreign direct investment

Foreign direct investment 2015, € billions
Year Inward stocks Outward stocks Balance
2015 34.9 168.4 133.5

Date of retrieval: 15/02/2017

More statistics on China

EU and China

When China joined the WTO in 2001 it agreed to reform and liberalise important parts of its economy.
While China has made progress, some problems remain:

  • a lack of transparency
  • industrial policies and non-tariff measures that discriminate against foreign companies
  • strong government intervention in the economy, resulting in a dominant position of state-owned firms, unequal access to subsidies and cheap financing
  • poor protection and enforcement of intellectual property rights

In 2016 the EU adopted a new strategy on China mapping out the European Union's relationship with China for the next five years. The Strategy promotes reciprocity, a level playing field and fair competition across all areas of co-operation.

The strategy also includes a trade agenda with a strong focus on improving market access opportunities – including negotiations on a Comprehensive Agreement on Investment. It also deals with overcapacity and calling on China to engage with ambition at multilateral level. 

Investment

The EU-China 2020 Strategic Agenda for Cooperation puts an EU-China Investment Agreement as central to the EU’s long-term bilateral relations with China. Negotiations for the Investment Agreement began in 2013  
The negotiations aim to:  

  • improve investment for European and Chinese investors by creating investment rights and guaranteeing non-discrimination  
  • improving transparency, licensing and authorisation procedures
  • providing a high and balanced level of protection for investors and investments
  • rules on environmental and labour-related aspects of foreign investment

The EU concluded an impact assessment  before negotiations started. It is now carrying out a Sustainability Impact Assessment to assess the potential economic, social, environmental, and human rights impact of the agreement.
The EU has commissioned studies to keep negotiators informed of the current trade picture, including:

Dialogues and meetings

The EU and China discuss policies and issues regarding trade and investment in a range of dialogues:

  • the annual EU-China Summit: presidential level exchange on enhancing policy coordination on a number of issues, including trade
  • the EU-China High Level Economic and Trade Dialogue: EU vice-president and Chinese Vice Premier meet to discuss issues, accompanied by EU Commissioners and Chinese Ministers
  • Joint Committee on Trade: annual ministerial-level meeting
  • Trade and Investment Policy Dialogue: Director-General level meeting
  • Economic and Trade Working Group: expert-to-expert discussion

Trading with China

Practical information for trading with China

Third party relations

The EU's work with China