European Council President Charles Michel and European Commission President Ursula von der Leyen came and went. Before the two came, the West speculated that Ukraine, Xinjiang, and Taiwan would become the main topics, but the main thing to talk about was **.
After the San Francisco APEC was finalized, the EU was understandably anxious for the summit for fear of falling behind. But it is understandable that there are not many expectations for the outcome of the talks. It is said that the biggest takeaway for the EU is that China is finally listening to Europe. The last time I came, I was reprimanded by China with my ears in my ears, and I didn't intervene much.
But if you want to talk about **, China will not doze off. The EU does have a lot to talk about, retreat is just to feel good for yourself, and pragmatism is the right thing. Von der Leyen is particularly unhappy with the fact that China's surplus has doubled to nearly 400 billion euros in the three years since the pandemic. Whoever sees such an exponential growth of the ** imbalance must ring the alarm bell.
Now there is a new normal: European countries are talking about friendship in bilateral talks with China, and the EU is the leader of the evil actors who want to put pressure on China, a role that von der Leyen was keen on.
The EU's grievances against China are twofold:
1. There is a difference between China's best procurement inside and outside
2. China's overcapacity
BothChina cannot budgeTarget.
*Procurement is certainly different from inside and outside, and it is the same for all countries. There may be differences not only within and outside the country, but also within and outside the region. There is no way, the first consideration at all levels is that fertilizer and water do not flow into the fields of outsiders.
Overcapacity in China is an interesting issue.
Old Europe has had enough of China's production capacity. Not to mention steel, aluminum, cement, and plastics, photovoltaic and wind power, which were originally leading in Europe and ready to be used as new growth points, were suddenly beaten out in the middle of looking around, and then there was no chance to turn over.
These are the passing waters of the Yangtze River, and the two ships of photovoltaic and wind power have been completely missed, and it is useless to think about it. Europe does not want to miss the next two ships, one is the tram and the other is the chip, the problem is that Europe itself is not angry.
Cars are too important for the European economy. Chinese only see German cars, in fact, French and Italian cars are also economic highlights, Spain, Slovakia hang the tail of German cars, the Netherlands also has trucks, but the ability is not enough, was beaten out by the Chinese market. But in the age of trams, even German cars could not resist. Europe is not only afraid that the Chinese market will roll out German cars, but also afraid that Chinese trams will roll all the way to Europe, so that European cars will have no way out. There are already signs of this.
Chips are a different issue. In addition to the partial projects, European chips are not powerful, but seeing the core role of chips, they also want to build their own chip industry, and even the United States and Taiwan can't believe it. The problem is that China has made great efforts, starting with mature chips, and has swept in, and is desperately climbing the technology slope, intending to take it all from high to low. Europe is afraid of the recurrence of steel, aluminum and photovoltaics, and rolls Europe out of its own door.
The problem is: China is seriously engaged in a market economy, and trams and chips are supported by policies, but not policy economies. It is the practice of the world to get policy subsidies in the initial stage, and Europe is actually the initiator, but if China's tram now wants to say that it is low because of the first subsidy, it is to speak with a clear conscience. SAIC MG went to Europe to increase the price and kill all sides, which is an example. It's the same with chips.
The EU wants China to "regulate" exports, how can this be controlled?
Von der Leyen threatens to "use the tools in the toolbox", and the EU uses even less!If this worked, it would have been done a long time ago, and Europe did not salute before the soldiers to restrict Chinese tires, steel and aluminum.
In fact, the problem of the EU-China balance is far more structural than that of trams and chips. Except for Germany, Europe's deindustrialization is no worse than that of the United States, how can it always rely on bags, wine, and cosmetics?Profit margins are high, but the total volume is still not comparable to that of bulk industrial manufacturing.
Take a look at what the major EU countries are doing to China**. There is only 2021 data, and China's surplus should be larger in the current data, and China's automobile and chip exports are also larger.
Germany:
China's exports were 134 billion US dollars and imports were 121 billion yuan, with a slight surplus. Although the surplus reached 13 billion, it accounted for only 5% of the total import and export, which is not small.
From the perspective of product categories, China and Germany are both manufacturing countries, which is reflected in the import and export of mechanical and electrical are the majority, properly complementary. Blue for mechanical and electrical (including industrial electronics, consumer electronics, chips), light blue for transportation (including automobiles and aircraft), rose red for fine chemicals (including drugs, cosmetics), gray for light industry (including toys, lamps, furniture, etc.), brown for metals (including steel, aluminum and copper), dark green for clothing, medium green for footwear, yellow and green for food, light green for luggage, pink for plastics, crimson for precision instruments, other plates are too small, not explained.
Obviously, if there is no way for German cars to be exported to China, the balance will be greatly tilted.
France:
China exports $47.5 billion and imports $27.8 billion, with a larger relative and absolute surplus than Germany. Interestingly, France's GDP is about 2 3 of Germany, but China and France are only 1 3 of China and Germany.
China's exports are still dominated by mechanical and electrical, and there are more clothing, but imports are not good. In the mechanical and electrical industry, aviation development occupies the largest block, the car in the traffic has no shadow, it is all airplanes, and the largest plate is cosmetics and perfumes. Bags (light green), agricultural products (earth yellow), meat (meat red) have become the main plates, relying on these to balance the best of mechanical and electrical products, how is it possible?
No wonder France has instigated the EU to launch a countervailing investigation on Chinese trams, and if it is not protected, French cars will be wiped out.
French cars can't beat German cars, but the two are like gentlemen's agreements, the well water does not interfere with the river water, France does not see German cars, and of course Germany does not have a French car. However, the "unruly" Chinese trams made French cars very nervous.
Italy:
China's exports were $45.6 billion and imports were $19.1 billion, further increasing its relative and absolute surplus. No wonder Italy is furious and wants to withdraw from the Belt and Road Initiative.
China's exports are still the same story, and car exports have climbed to a higher position. Among the imports from Italy, the electromechanical category is the largest segment, but the largest export is valves, and then gas turbines. There are a lot of clothes in Italy's exports to China.
Netherlands:
China exports $88.3 billion and imports $16.3 billion, and the imbalance is larger than Italy's.
China's exports are a similar story, and the largest imports are ......Dangdang, lithography machine!It is no wonder that the Netherlands has been reluctant to join the US embargo, and it has to be delayed until the end, because this is the most advantageous export for the Netherlands, and the Netherlands cannot rely on Philips light bulbs and Shell lubricants to focus on exports.
Lithography machines are the largest single export of the Netherlands, accounting for 14% of the Dutch exports to China8%！The second largest is maltose, 934% (grass green), estimated for food and alcoholThe third largest is pork (368%, flesh-red). The old industrial countries have "fallen" to such a point that if ASML is not allowed to export to China, Dutch exports will collapse. Maltose and pork had to be balanced by mobile phones and computers**, which was more desperate than the cavalry of the Monk Grinqin against the gunners of the Anglo-French army.
Poland:
It can't all be compared to the old Europe, Poland is a good mix in the new Europe, plus.
China's exports are $45.8 billion, while imports are only $37$600 million, a difference of more than 10 times!
The composition of China's exports is similar to that of other countries, and the largest import sector is also electromechanical, but the largest single item is transformers (3.).74%), and then textile machinery (3.).21%), which is clearly imported by China "cheaply", and not because of how good Polish products are. China can afford all of this on its own, but if it's cheaper to buy it from Poland, then buy it.
However, the absolute largest single item imported from Poland is refined copper, accounting for 225%。
The largest sector of China's exports is "forever" electromechanical, and the largest single item is usually "computers", "broadcasting equipment" (presumably televisions and the like, mobile phones and communications should also be counted), and "office equipment". These things are not expensive, but no matter how expensive French wine is exported in large quantities, it is not as expensive as a mobile phone;No matter how expensive Dutch pork is, it can't compare to a laptop. What's even worse is that the amount of mobile phones and laptops is much larger than that of wine and pork.
There was a time when China wanted to buy everything in Europe, but it didn't have the money. Now it's the other way around, China has money and is willing to buy, but what to buy?Some don't need to buy more, such as Airbus;Some want to buy but don't sell, such as ASML lithography machines;There are also some that they do not want to buy more and more, such as German cars.
China has repeatedly stated that China does not pursue surpluses, and China also wants to buy more, but first, "you" cannot restrict me from selling with unfair market rules, and second, "you" cannot abuse the *** clause to restrict me from buying, otherwise there is no need to talk about the balance.
Von der Leyen threatens to use the toolbox, but looking at the volume and variety of Central European products, her question is not how to sell more European products, but how much to limit how much Chinese products will hurt Europe. Many of China's imports from Europe are not necessities, especially perfume, wine, and pork, but Europe's imports from China are basically necessities, and the share of non-essential goods such as silk and tea can only be found by looking through a telescope.
As for China to limit production capacity, the market economy is the market economy, China is in a hurry to make money, China is cheap and good, why don't good money eliminate bad money?Product upgrades have invaded Europe's comfort zoneThere is no way, Europe can't lie down on its own and stand in the way of China.
Europe has become too Xi to a comfortable pace of life. The rise of the United States and Japan did not excessively threaten the European way of life, and the rise of China still helped the European way of life at the beginning, because Europe could collect more taxes from multinational companies and reduce the cost of living with cheap Chinese imports, so that Europeans could live idlely, "return to nature", talk highly, and be content to decorate their lives with "high-quality European manufacturing".
The coronavirus pandemic and the war in Ukraine seem to have hit the European economy harder than imagined. The decline in the income level of Europeans, high energy** and high inflation have hit Europe's low-end product manufacturing industry hard, and it can only rely more on Chinese manufacturing, which has made China's surplus with Europe grow in the past three years. The rumor that the export cannot be sold is certainly not nonsense, but looking at the rise of the China-Europe ** surplus, it seems that there is always something that is not right.
The Federal Reserve's interest rates remain high, and Europe has no choice but to follow suit, and the pressure on the European economy cannot be eliminated for a while. In the long run, Europe's dependence will be deeper. No wonder von der Leyen did not dare to speak of decoupling, only de-risking.
Europe's problems are like the Rust Belt in the United States and the beaches of Florida, low labor productivity combined with high cost of living, and a high-welfare, high-leisure lifestyle, which is a little unsustainable under the impact of China-made floods.
Article**: Chenfeng Old Garden.