They age-long rivalry between global giants US and China for the coveted position of ‘Worlds Biggest Economy’ has seen the odds inch closer to the favor of China.
This is with the emergence of the country as EU’s biggest trading partner beating the US and the UK in 2020.
The harsh economic impact of the coronavirus pandemic dealt blows on crude oil prices, travel bans and other control measures played major roles in the current economic status of China.
Reports say as at last year 2020, trade between China and the EU was worth $709bn (€586bn, £511bn) when compared with $671bn worth of imports and exports from the US.
Despite the challenges faced by China’s economy in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods.
The Asian country was the only major global economy to experience economic growth in 2020, stoking demand for European cars and luxury goods.
Meanwhile, China’s exports to Europe benefited from strong demand for medical equipment and electronics.
“In the year 2020, China was the main partner for the EU. This result was due to an increase of imports (+5.6%) and exports (+2.2%),” according to Eurostat, the EU’s statistical office.
The figures were similar to China’s official data published in January, which showed trade with the EU grew by 5.3% to $696.4bn in 2020.
The EU’s trade deficit with China also grew from $199bn to $219bn according to Eurostat figures, which were released on Monday.
Statistics revealed that although the US and the UK remain the EU’s largest export markets, trade with both countries dropped significantly.
“Trade with the United States recorded a significant drop in both imports (-13.2%) and exports (-8.2%),” the data agency said.
Furthermore, pockets of trade disputes have affected existing Transatlantic trade relationships resulting in tariffs on steel and products such as French Cognac or American Harley-Davidson motorcycles.
Experts have argued that the long lasting impact of the Chinese trading pole position on US would have dealt a great blow on the movement of goods and services between US and China as obtained in the past.
According to the polls, around 40 percent chose the economic battle, 35 percent chose technology, around 31 percent went for the containment of China while the rest opined trade protectionism.
More than 62 percent of Kenyan respondents agreed that the nature of the China-US trade war is essentially a competition in high technologies. The percentage of respondents agreeing with the idea exceed 40 percent in some other countries including South Africa, Spain, India and Indonesia.
The US is containing China’s technological development by increasing tariffs on China’s high-tech products. But the international community has recognized China’s technological capacity and agreed that technological competition is the core of the China-US trade war.
Meanwhile, some respondents deemed the trade war as China’s fight back against the US’ hegemony, including 42 percent from Egypt, 37 percent from China and 32 percent from South Korea, mirroring similar thoughts. The data demonstrate that some countries have clearly espied the US’ hegemony and paid more attention to China’s resistance.
On the future course of the trade war, only 8.3 percent of the Chinese respondents think it will be solved anytime soon through negotiations with 28 percent of the US respondents agreeing with them. Meanwhile, 42 percent of Chinese respondents and 33 percent of US respondents worry that the trade war would worsen.
With high growth rates during the past two decades and the largest trade surplus with the United States, China is the primary target of the U.S. trade war efforts. Tariffs are the first shot in bilateral tensions that are multilateralizing and injuring global economic integration, coupled with ever more intense technology competition.
According to reports, in 2020, the US had a trade volume of $671bn with the EU, down from $746bn the previous year. With the emergence of the Joe Biden administration which took over power and exercised disapproval of previous policies of Donald Trump, it’s not year clear if there would also be a re-evaluation of the US approach to trade with Europe.
The EU and China, however, are trying to deepen their economic ties, with both sides seeking to ratify an investment deal that would give European companies better access to the Chinese market.
Analysts are tipping global trade to turn around in 2021 after a lacklustre 2020.
Details from research firm IHS Market revealed that the real value of global trade is set to rise by 7.6% after an estimated contraction of 13.5% in 2020 to $16.4tn.
Observers are however keen on seeing the turn of events as the Trump’s administration digs deeper into global economic deals and agreements with a view to reigniting the fierce battle for supremacy between US and China.
But until that happens, China sits atop the throne of the global economy.