The President of the Government, Pedro Sánchez, begins this Sunday in China a tour focused on strengthen economic and trade relations that includes a meeting with its president, Xi Jinping. The meeting is taking place in a moment of high tariff tensions for Spain: China is our fifth trading partner – the first outside the EU – and our second supplier of goods. It is also the main customer of Spanish products in Asia.
In this fluid relationship, there are two very sensitive points: office equipment, the goods we buy the most, and meat. It is the flagship product of Spanish exports and it is now the target of an investigation anti-dumping promoted by the Chinese authorities in response to European tariffs on their electric cars. This will in fact be a major topic of the Spanish visit.
Both elements are usually the protagonists of commercial relations which are historically deficient for SpainIn the first half of this year, this gap left a negative balance of 17.272 million for our country, which has considerably widened the gap between exports and imports with the Asian giant in 2022.
That year, Spain recorded a negative balance of 41,811 million euros, according to data from the Ministry of Economy, Trade and Business. The amount was 56% more than the previous yearan increase that can be explained by the increase in Spanish purchases in China, particularly office equipment and also clothing.
What does Spain gain from its increasingly unequal relations with Beijing? On the export side, substantial changes have taken place over the last thirty years: we have gone from selling essentially specific office machinery and equipment to the transformation chemicals in large part.
In 2023, Spain made sales of chemicals to China worth close to 2.4 billion eurosThe next item was ores and minerals, worth 1.350 million, and the third was meat, which amounted to 1.225 million. The latter is the most sensitive item, even if it is not the first in value.
Because? China is the second largest buyer of Spanish meatwhile in the case of chemicals, sales are more diversified. The Asian giant is the fourth non-EU market targeted by Spanish chemists, after Switzerland, the United States and the United Kingdom, according to the latest report on foreign trade of the Spanish chemical and pharmaceutical industry.
But for the meat sector, Beijing is the main stake after France. Sales of meat products – mainly pork – to China amounted to 1.225 million in 2023. We have to go down to fifth place to find our next non-EU customer: Japan, where turnover amounts to 653 million euros.
Therefore, possible Chinese retaliation in this sector is one of the issues that most worries the Spanish trade delegation.
The rise of the pig
Spanish pork sales began to boom in 2018, when African swine fever devastated China’s herd. The Asian country then increased its imports to meet demand. Two years later, Spanish sales to the Asian giant amount to 3.134 million euros.
In fact, 2020 was a record year for meat exports: 1.34 million tonnes were sold to China. This figure has been gradually reduced as Beijing’s own production has recovered. Last year, we exported 542,000 tonnes.
This development has meant that in recent times, Spanish pork has been examined with greater attention in the commercial accounts of our country, despite the continued reign of chemicals. In 2023, they represented an income of almost 2.4 billion for Spanish accounts.
In this section, they highlight medicinesby far the most important product in value with 1.4 billion euros in sales last year, followed by plastics (517 million) and essential and perfumed oils (161 million).
Office equipment purchases
On the contrary, Spain buys mainly office equipment from China. In this concept, they spent almost 7,350 million euros in 2023, particularly in the category of telecommunications and other goods such as electrical appliances (transformers, motors and others).
The products also have a significant weight textileLast year, Spain made purchases from China worth 5.018 million euros, of which imports were toys (1,850 million) and shoe (1.524 million).
In these cases, there has been more stability over the years. Over the last three decades, for example, textiles have been one of the main categories imported from China.
The changes made at this time were few and were accompanied by technological advances: office equipment overtook toys and consumer electronics. In addition, The automotive sector has stood out in the last two years: In 2023, we will purchase 3.245 million cars and motorcycles, and almost 500 million components.
Sanchez, the last to approach Xi
Sánchez’s visit to China raises additional expectations from a commercial point of view due to the current tariff tensions between the Asian giant and the European Union (EU). These frictions have targeted different European products and have led several leaders to intervene. to protect their national industries.
This has been the case, for example, in France, which has so far had the most favourable outcome in the Community context. As is currently the case for Spanish pork, European brandy has also been the subject of research anti-dumping by the Chinese authorities, an issue that has had a considerable impact on French cognac, an emblem of the sector.
Xi Jinping, President of China and Pedro Sánchez, President of the Government, a few minutes before proceeding to the signing of various trade agreements.
Beijing softened its tone last week and said it would not impose provisional tariffs while trade talks with Brussels continue. The flexibility came three months after French President Emmanuel Macron held talks with Xi on the issue in Paris. Macron later thanked the Chinese president for his “open attitude” toward the investigation.
Italian Prime Minister Giorgia Meloni also made a decision. In late July, Meloni met with Xi and signed a industrial collaboration protocol which includes electric vehicles and renewable energies. The aim is to strengthen investment in their country’s automotive industry.
