| November21,2013, Chinese Premier Li Keqiang met President of the EuropeanCouncil Herman Van Rompuy at the Great Hall for the Sixteenth Meeting of Chinaand EU Leaders. The leaders made up the strategic programming of EU-Chinacooperation2020. It identifies the common goals of strengthening cooperation inpeace and security, prosperity, sustainable development, cultural exchanges and otherareas. This plan will promote China-EU comprehensive strategic partnership in thenext few years. China is the largest developing country and EU is the largestdeveloped country group in the world. In addition, China-EU trade relations havegreat potential. After the EU enlargement in2004, it became China ’s largest tradingpartner and last for nine years. In the mean time, China is the EU ’s second largesttrading partner. time after the U.S..EU-China bilateral economic and trade cooperationarea is constantly expanding, and the complementation of resources and productstrengths gradually realized.There are several methods used during the study. First, it uses qualitative analysiscombined with charts and data statistics to research and explain China-EU tradestructure’s history and present situations. After that, China-the EU’s overall tradestructure changes were discussed and analyzed by the data charts. Further more,empirical analysis methods including the use of trade index, including tradecombination degree, trade complementarity index and the extended gravity model ofChina-EU trade are all used to study the China-EU trade structural changes and itsimpacts on China-EU trade. And get the following conclusions:First, China and EU keep maintaining close contact in the traditional and primary products trade. Pay attention on the trend, if differentiation advantages and thegovernmental cooperation agreements are not actively developed, China willgradually lose the trade dependence of EU on this kind of products due to the highcost. In fact, Chinese trade competitiveness in traditional and primary products aredecreased substantially, but at the same time, the EU’s trade competitiveness of theseproducts remained relatively stable, with only mild fluctuations. While wheat andsoybeans can not meet domestic consumption needs, we need to import largequantities each year. We are transferring into a large country of traditional primaryproducts importer. On the other hand, the ASEAN countries such as Indonesia,Malaysia, Thailand and other countries have become the preferred primary productsimporter of China, so as the EU, and this trend will be more and apparent as China ’seconomic development and increasing resource costs.Secondly, our technology or capital-intensive products import has stable developmentand a good trend in recent years. Whether China or EU as the exporting country, thetrade complementarity index of capital-intensive products are greater than one andkeep an upward trend, but still less than labor-intensive products’. Especially whenEU is exporting country, the products’ complementary index never exceeded1.2. Thatmeans, although China has a wide range of technology or capital-intensive products’trade with the EU member states, such as Germany and other countries, the productscomplementary is not very strong, and has certain homogeneity. On the one hand, thisreflects the lack of sophisticated technology products trade between China and EU; onthe other hand, it also reflects that the EU enterprises in China have made outstandingcontributions in the EU-China trade in technology or capital-intensive products.Overall, or revealed comparative advantage of technology or capital-intensiveproducts increased year by year over the past decade, while the EU’s is relativelystable. Thirdly, although there is large scale of labor-intensive products imports from Chinato EU, the indispensable trade relationship is not actually formed because of theproducts’ characteristics such as low-tech, increasing human cost, substitutability andso on. In addition, a view of different kinds of products, the China-EU tradecomplementarity of labor-intensive products is the strongest, not only because of costconsiderations, product differentiation is also a major factor affecting China-EU tradeof such products, and it will become increasingly important as time goes on. Althoughthe increase of the revealed comparative advantage index is small, its steady growthtrend shows that China, while actively developing technology or capital-intensivebusiness economy does not cause short-board in labor-intensive industries. But withthe rise of labor costs, these products’ revealed comparative disadvantage is starting toappear.Fourthly, compared with the Chinese products’ revealed comparative advantage, EU’sis higher on the whole. And the gap between the advantages of different types ofproducts is smaller, especially in technology or capital-intensive and labor-intensiveproducts.Fifthly, intra-industry trade between China and the EU have been dominant, makinguse of the transfer of dynamic comparative advantage of international under theconditions of globalization, China’s labor-intensive products become the major kind ofproducts exported to the EU, and make trade surplus through this. The EU has astrong advantage in exports to China in the field of high-tech products’ trade, but itwill be gradually weakened with the trend of China’s industrial upgrading.Sixthly, for the EU, the impact of EU GDP per capita to exports to China is greaterthan the impact of EU imports from China. So the following conclusions can bedrawn: for the EU, where people has higher average incomes, the increase of revenues will significantly reduce the export of Chinese products and expand the domesticmarket, while it will moderately impact the import from China. Therefore, theproducts the EU exporting to China have higher price or add value, while products theEU imports from China are mostly relatively cheap, have stronger fungibility andlower price. Also, GDP has greater impact to the EU exports to China than the importsfrom China.Conclusions can be explained as follows: As the improvement of proportion ofhigh-tech and high added value products in Chinese exporting products, the tradecomplementarity between China and the EU is becoming weaker and weaker, and thechanges in the structure of China-EU trade in goods will play an increasinglyimportant role. However, substantial growth in bilateral trade does not represent thatChina gains more from EU-China trade. In the view of commodity structure of tradein goods between China and the EU, China’s exports have large proportion oflabor-intensive products, the manufactured goods are low-graded, and highvalue-added and high-tech products’ proportion is too low.In order to realize the further progress and table development in China-EU trade in thefuture, we should take measures to expand our own advantages and compensate forthe disadvantages, and reduce the obstacles at the same time. Analyzing the studyconclusions with Diamond Model and Theory of Preference Similarity, eight policyrecommendations can be drawn from our point of view, including treasure the tradepartner EU on a strategic height, take cognizance of the importance of the EU’strade, improve our industrial competitiveness, expand our domestic demand,strengthening regional cooperation, accelerate industrial upgrading and optimize theindustrial structure, encourage the establishment of industry associations, activelyrespond to trade frictions between China and the EU, strengthen cooperation of twosides’ governments to gain mutual benefit and accomplish the win-win situation, balance the trade relationship between China and every other EU member states andstrengthen the cooperation between small and medium enterprises of China and theEU, etc., so that a positive effort can be made for the development of China-EU trade. |
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