European Union Challenges China

A sharp rise in European imports from China has resulted in a startling trade imbalance of US$135 billion that demands immediate action.

European Union (EU) imports of Chinese shoes have more than doubled from US$2.5 billion in 2000 to $6 billion in 2005. Similarly imports of electronic goods like laptops and cellphones from China have surged from $20 billion to some $47 billion over the same period.

EU's trade deficit with the People's Republic swelled to US$135 billion in 2005 from $61 billion five years earlier. The accelerating deficit is pushing the European Commission to demand that Beijing open Chinese markets more fully to European goods and services, crack down on technology copycats, and to allow the Chinese currency to strengthen.

If China's fails to fully embrace EU's proposals for a more level playing field, EU will impose new anti-dumping duties on a range of products imported from China. Currently EU already has punitive anti-dumping tariffs on Chinese shoes and more than 30 other imported goods.