Europe'S Trade Attitude Towards China Has Become A Bit Cold.

A few years ago, when the United States had disputes with China due to the sudden increase in trade deficit, European countries usually looked at it coldly.

In the face of the United States' proposal to impose sanctions on China jointly, the answers from European countries are mostly ambiguous.

At that time, the trade deficit between European countries and China was very small. Many European countries assumed that their residents would not import Chinese goods as Americans did.

However, this stand off attitude may not last long, because European countries will soon find that their trade deficit with China is also soaring rapidly.

Last week, 12 euro zone countries released the latest trade statistics report.

Data show that in February this year, the trade deficit between the euro area countries and China was as high as 6 billion 900 million US dollars, and in the past 12 months, the trade deficit between the euro area countries and China has reached 78 billion euros (about US $97 billion).

It is worth pointing out that this figure is still negligible compared with the US trade deficit of 204 billion US dollars.

Editor's note: the data is unilaterally published by the US Department of Commerce and has not been approved by China. China believes that the actual deficit may not be so large due to the different statistics.

Nevertheless, the growth momentum of euro zone countries' trade deficit with China can not be ignored.

According to the proportion of trade deficit in GDP, euro zone countries' trade deficit with China is almost the same as that of the United States.

In fact, the growth of trade deficits between European countries and China is very similar to that of the United States 5 years ago.

Therefore, it is only a matter of time for European countries to produce trade frictions with China.

"The business miracle created by WAL-MART has become a commonplace in the United States," said Robert J. Barbera, chief analyst of ITG/Hoenig, a brokerage firm.

He said: "this kind of business model that will lead to massive market entry of cheap commodities will soon appear in Europe."

For countries that have not yet joined the European unified currency, an independent exchange rate policy may provide some protection for their manufacturing industry.

But for those already in the euro zone, the flood of cheap Chinese goods will soon put pressure on local manufacturing.

"For Italy's family businesses, the competition pressure from China may be more obvious," Barbera said.

The latest trade statistics also show that Europe seems to be doing better than the US in terms of exports to China.

In 2005, the total export trade volume of the 12 euro area countries to China was 43 billion euros (about 50 billion US dollars), compared with that of the United States, which exported a lot of US $48 billion to China.

At present, European countries export mainly to machinery and equipment. Chinese enterprises buy these machines and equipment to produce shoes and clothing, and then sell them to the European market.

However, China's import demand for these machinery and equipment is gradually decreasing because China has already been able to produce these devices autonomously.

However, China's export commodities still maintain a sustained and flourishing situation.

This will inevitably lead to a widening trade deficit between China and Europe.