Europe's relations with China: A reorientation of economic dependencies

In November 2020, the Mercator Institute for China Studies (MERICS) published a study analysing the economic dependencies and relations between the EU and China, with a focus on the circular economy.

The study, which was conducted between 2000 and 2019, shows that trade between the EU and China grew almost eightfold to 560 billion euros during this period. China is now the EU's second most important trading partner. Despite these links, European companies' dependence on China remains limited, as they only generate an average of 11.2 % of their turnover in China. However, the COVID-19 pandemic has revealed specific dependencies, particularly in the pharmaceutical, chemical and electronics sectors, where the EU is heavily reliant on Chinese imports in 103 product categories.

The study emphasises the Importance of the circular economyto this Reduce dependencies and the strengthen economic resilience. Circular economy strategies could thus reduce dependence on critical imports and promote sustainable economic practices.

With this study, MERICS provides valuable insights for European decision-makers and companies to strategically manage their relationship with China and support the transition to a circular economy.