When it comes to China, Europe should focus less on its trade deficits and more on its investments
中文标题
对中国，欧洲应少关注贸易逆差，多关注投资
Core conclusion · Tlines extraction
The EU's manufactured goods trade deficit with China reached €400bn over twelve months, driven by a 7% y/y rise in imports in H1 2026. However, exports excluding Germany have stabilised and even grown, with declines concentrated in automotive and electronics. The report argues Europe should prioritise defending its market and boosting domestic investment over rebalancing bilateral trade.
- Institution
- BNP Paribas
- Published
- 10/05/2026
- Research topic
- Not explicitly stated
- Time horizon
- 2026 · 2022 · Q2 2026 · 2025
Key arguments
- The decline in EU exports to China is not broad-based; automotive and electronics account for over 80% of the drop since 2022, while other sectors and services have held up.
- Germany is disproportionately affected, with exports to China falling by €32bn (-30%) since 2022, but excluding Germany, EU exports have been stable and rose 5% y/y in H1 2026.
- The real challenge is China's move upmarket in imports to Europe, and the EU's reliance on Chinese intermediate and strategic goods, which limits the scope for trade barriers.
- Europe should focus on domestic investment and deepening the Single Market to boost competitiveness, rather than fixating on the bilateral trade balance.
Key numbers
- EU trade deficit with China (12m)
- €400bn
- Deficit as % of GDP (vs 2022 peak)
- 2.1% vs 2.5%
- China's share of extra-EU imports
- 23%
- Germany's export decline to China since 2022
- -30% (€32bn)
- Additional annual investment needed (Draghi)
- €750-800bn
Main risks
- The EU relies on China for critical metals and other strategic products; China could impose retaliatory measures, as illustrated by the 2025 rare earth restrictions.
- Chinese imports are moving upmarket rapidly, and sectors where Europe still holds ground, such as pharmaceuticals, could face similar competitive pressures as automotive.
- The EU's manufacturing surplus excluding China declined in 2026 due to falling exports to the United States, and deficits with ASEAN and Taiwan have widened, indicating broader trade challenges.
Corresponding source evidence
ECO WEEK ALL ECO WEEK Home > Eco Week > Eco Week 5 octobre 2026 EDITORIAL WHEN IT COMES TO CHINA, EUROPE SHOULD FOCUS LESS ON ITS TRADE DEFICITS AND MORE ON ITS INVESTMENTS 10/05/2026 PDF On 8 and 9 October, the European Commissioner for Trade and Security, Maro šŠefcovic, will visit Beijing.
· 2026The rest of the exports have held up signi ficantly better, as they have fallen by only 3% since 2022 (EUR -6bn) and have remained stable over the past year.
· 2022As a result, excluding Germany, exports by value have remained stable since 2022 and have even started to rise again this year (+5% y/y in the first half, compared with -12% for Germany; see Chart 1 ).
· 2022
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
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How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by BNP Paribas on 10/05/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page and is displayed in full above. Last updated 10/17/2026. Methodology · Source policy · AI usage · Request a correction