Imports from China into the euro zone have overtaken those from the US, according to official figures yesterday, which also highlighted the diminishing impact of foreign trade on euro-zone growth.
The data from Eurostat, the European Union's statistical unit, highlighted the rapid growth in Chinese imports, which has intensified the competitive challenge facing European companies. The euro-zone import growth pointed to a strengthening in domestic demand in the 12-country region, suggesting the economic recovery had become more broad-based.
"The US remains a significantly more important market for European exports, but when it comes to European imports, China is now just as strong as the US," said James Ashley, economist at Barclays Capital. In the first five months of this year, euro-zone imports from China were at €54 billion, 26 per cent higher than the same period a year before.
Imports from the US rose by just 8.8 per cent to €53 billion. For the EU as a whole, imports from China were up by 25 per cent at €72 billion, compared with an 11 per cent rise to €74 billion in imports from the US.
"By the end of the year, it appears likely that imports from China will exceed those from the US for both the euro zone and EU," said Mr Ashley.
The trade figures followed last week's strong growth data that showed the gross domestic product in the euro zone increasing by 0.9 per cent in the second quarter of this year - the strongest rate for six years and faster than in the US. Euro-zone export growth remains strong, according to yesterday's data, rising by a seasonally adjusted 0.3 per cent in June, after a 0.5 per cent rise in May.
But imports also grew at similar rates over the same period, reflecting domestic demand.
Economists said that the data showed net trade - growth of exports minus imports - was having less of a positive impact on euro-zone GDP growth.
In Germany, where the export success of engineering companies has led the recent upswing, the Bundesbank noted yesterday that the contribution to growth had diminished.
Instead, it stressed the increasing role played by domestic demand, particularly investment spending.
- (Financial Times service)
