EU and then exported them. Two-thirds of the commodities imported from China
by the EU were semi-manufactured products, which helped European enterprises
cut production costs and enhanced the competitiveness of the EU’s export prod-
ucts.^22 European enterprises enjoyed opportunities from the vast Chinese market
through investments in China. Investments made by East Asian economies in China
were dominated by vertical investments, with investments transferred into trade.
Investments made by European enterprises in China were mainly represented by
horizontal investments, with investments replacing trade. On the one hand, foreign
investments enabled technology spillover, etc. to improve the competiveness of
Chinese products and promote China’s exports to the EU; meanwhile, large-scale
import of semi-manufactured products and components made in China contributed
to boosting the competitiveness of the EU’s export products and thus propelled the
EU’s exports; on the other hand, as more and more EU enterprises made invest-
ments in China, their commodities were sold on the Chinese market and replaced
the EU’s exports to China, thus worsening the China-EU trade disparity.^23 Some
studies have proved that the EU’s direct investments in China constituted one of the
causes for expanding China’s trade surplus with the EU.^24
The results of research on the global value chain recently released by the United
Nations Conference on Trade and Development, the World Trade Organization, the
World Economic Forum, etc. have also validated changes in the global value chain
and layout adjustments in the context of globalization, especially the roles played in
China’s foreign trade.^25
The Author calculated the proportion of domestic added value in China-EU trade
in foreignfinal consumption and the proportion of foreign added value in domestic
final consumption according to data from the“Trade in Value Added (TiVA)”
jointly developed by the OECD and the WTO. As shown in Fig.3.7, in 2008,
China’s exports to the EU were 372.3 billion USD, among which 256.6 billion
USD and 115.7 billion USD were domestic added value and imports respectively,
while repeated calculation of exports resulting from imports accounted for 31 % of
China’s exports to the EU. Similarly, in 2008, China’s imports from the EU were
299.3 billion USD, while the portion of imports which entered domesticfinal
consumption was 136.3 billion USD; 163 billion USD from imports did not enter
domesticfinal consumption but were re-exported through processing trade, in
which case, repeated calculation of exports resulting from imports accounted for
54 % of China’s imports from the EU. In other words, nearly 1/3 of China’s exports
(^22) Fredrik Erixon,“Back to Basics: Economic Reforms and EU China Relations,”ECIPE Bulletin
No.09/2012.
(^23) Feng Lei, Wang Yingxin:A Study of China’s Trade Surplus with the EU,http://ies.cass.cn/
Article/xshd/xshddsj/200710/539.asp.
(^24) Ye andYu ( 2008 ).
(^25) UNCTAD,“Global Value Chains: Investment and Trade for Development,”World Investment
Report 2013, UNCTAD 2013ưWTO,“Trade Patterns and Global Value Chains in East Asia:
From Trade in Goods to Trade in Tasks,”WTO 2011.WEF,“The Shifting Geography of Global
Value Chains: Implications for Developing Countries and Trade Policy,”WEF 2012.
3 China-EU Economic and Trade Relations 81