BEIJING – Economic ties between China and Europe are set to hit a challenging patch in 2024, with several hot-button issues increasingly difficult to tackle, according to the president of the European Chamber of Commerce in China, Mr Jens Eskelund.
In an interview with The Straits Times, he said: “We are approaching a point where the old model doesn’t work, and the two sides need to recalculate and decide what the new relationship should be like.” Mr Eskelund took over the chamber’s top role about six months ago.
The “old model” referred to by Mr Eskelund, who is also Danish shipping giant Maersk’s chief representative for Greater China and north-east Asia, has resulted in the EU having a record €396 billion in trade deficit with China in 2022.
This record trade deficit has made headlines and sparked concerns in Europe about its reliance on China. EU ambassador to China Jorge Toledo in September described the bloc’s deficit with China as the “highest in the history of mankind”.
Chinese vehicles and machinery exported to Europe make up about half of China’s trade surplus with Europe. The rest comprises chemicals, energy and other manufactured products.
Compared with China, the EU’s trade deficits with the United States and Asean were at US$202.5 billion and US$56.4 billion, respectively.
Mr Eskelund, who has lived in China for 25 years, said that given China’s sluggish recovery since its Covid-19 re-opening, the country has not been able to absorb its products domestically. As a result, the world’s factory has been exporting in bigger volume globally, including to countries in Europe.