China Overtakes the US as Europe's Largest Trading Partner

China has become the European Union's (EU) top trade partner, surpassing the US in the third quarter thanks to the COVID-19 pandemic that disrupted US trade even as Beijing bounced back.

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According to the latest data published by the European statistics office Eurostat, during the first nine months of this year, trade between the European Union (EU) and China increased to 425.5 billion euros, 12.1 billion more than during the same period in 2019, compared to 412.5 billion between the US and the Community block.

"These results are explained by an increase in imports [from China, 4.5%], while exports remain the same," said Eurostat, mentioning that both imports and exports between Washington and Brussels fell by 11.4% and 10%, respectively.

According to the World Trade Organization (WTO), in total, the EU's trade deficit with the Asian giant was 135.9 billion euros in the first nine months of this year, compared to 123.9 billion in the same period in 2019. In this regard, the WTO reported that China was responsible for exporting 44% of personal protective equipment during the same period.

Despite the surge in trade, EU-China relations have not been smooth. In October, EU leaders asked Beijing to finalize a stalled investment agreement by the end of the year. EU leaders had in October renewed demands that Beijing makes good on its 2019 promises and open up Chinese markets for European companies.

The trade bloc has also repeatedly urged China to deliver on earlier commitments to address market access barriers and negotiate on industrial subsidies at the World Trade Organization. The investment accord between China and the EU has been under negotiation for more than six years, and it is likely to be finalized by the end of 2020. But Beijing continues to be reluctant to open up its economy.

Unlike the US, the EU has not resorted to a trade war with China but has restricted Chinese investments in Europe to force Beijing to change course, a Reuters report said in October.

The EU’s chief executive and chairman on September 14 at a virtual conference told Chinese President Xi Jinping to “tear down barriers” to European investment in China.