Impact of the Financial Crisis on China-EU Trade

The declines in trade flows in the closing months of 2008 and at the start of 2009 were larger than in past slow-downs. As China-EU trade and Economic relationship was one of the most important bilateral trade and economic relations in the world, it's necessary to examine how their trade relations are affected in the wake of the global crisis. It's concluded that and the EU both have experienced evident recessions in their merchandise trade in terms of values or growth. Despite the effects of the crisis, the EU is now still China's largest trading partner, While China is the second largest of the EU. This paper also analyzes the change in structure of exports and imports between the two sides. The EU's export growth to China is decomposed into three effects with a conclusion that the effect of change of China's demand for EU's products is not the main factor. Policy implications are finally provided from the perspectives of China and the EU respectively. The two sides need close cooperations to overcome the current difficulties in their trade relations.