The President of the Government, Pedro Sánchez, begins this Sunday in China a tour focused on boost economic and trade relations, including a meeting with its president, Xi Jinping. The meeting comes at a time when Moment of high voltage tariff tensions for Spain: China is our fifth largest trading partner – the first non-EU partner – and our second largest 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. This is the star product of Spanish exports and is Now in the crosshairs of an investigation anti-dumping promoted by the Chinese authorities in response to European tariffs on its electric cars. This will, in fact, be a prominent topic during the Spanish visit.
The two parties are usually the protagonists of commercial relations that are historically deficient for Spain. In the first half of this year, this gap left a negative balance of 17.272 million for our country, which dramatically widened the gap between exports and imports with the Asian giant in 2022.
That year, Spain recorded a negative balance of 41.811 billion euros, According to data from the Ministry of Economy, Trade and Enterprise. The amount was 56% higher than the previous yearan increase that is explained by the increase in Spanish purchases from China, especially of office equipment and also clothing.
What does Spain gain from these relations with Beijing that have become increasingly unequal? On the export side, there have been substantial changes in the last thirty years: we have gone from selling mainly specific machinery and office equipment to converting the chemicals in the majority of the market.
In 2023, Spain made sales of chemicals to China worth nearly 2.4 billion eurosThe next item was ores and minerals, with a value of 1.35 billion, and the third was meat, which totaled 1.225 billion. The latter is the most sensitive item, despite not being 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 to which Spanish chemicals are directed, after Switzerland, the United States and the United Kingdom, according to the latest foreign trade report of the Spanish chemical and pharmaceutical industry.
But for the meat sector, Beijing is, after France, the main bet. Sales of meat products – mainly pork – to China amounted to 1.225 billion in 2023. We have to go down to fifth place to find our next non-EU client: Japan, where sales amounted to 653 million euros.
For this reason, possible Chinese retaliation against this sector is one of the issues that most concerns the Spanish trade delegation.
The rise of the pig
Spanish pork sales began to boom in 2018, when African swine fever ravaged the Chinese herd. The Asian country then increased its imports to meet demand. Two years later, Spanish sales to the Asian giant rose to 1,000,000. 3.134 million euros.
In fact, 2020 was a record year for meat exports: 1.34 million tonnes were sold to China. The figure has been gradually decreasing as Beijing’s own production has recovered. Last year we exported 542,000 tonnes.
This development has led to a more careful consideration of Spanish pork in our country’s commercial accounts in recent times, despite the fact that chemical products continue to dominate. In 2023, they represented an income of nearly 2.4 billion euros for Spanish accounts.
In this section, the following stand out: the medicinesby far the largest product in value with 1.4 billion euros in sales in the last year, followed by plastics (517 million) and essential and perfumed oils (161 million).
Office Equipment Purchases
Conversely, Spain buys office equipment from China in particular. Almost 100 million euros were spent on this. 7.350 million euros in 2023, especially in the telecommunications category and other goods such as electrical appliances (transformers, motors and others).
The products also have a prominent weight textiles. Spain made purchases from China worth 5,018 million euros in the last fiscal year, in which imports of goods were also striking. toys (1.850 million) and footwear (1.524 million).
In these cases, there has been more stability over the years. Over the past three decades, for example, textiles have been one of the main categories to be imported from China.
The changes in this time have been few and have come hand in hand with technological advances: office equipment has overtaken toys and consumer electronics. In addition, The automotive sector stands out in the last two years: In 2023, we will purchase cars and motorcycles worth 3,245 million, and nearly 500 million in components.
Sanchez, the latest to approach Xi
Sánchez’s visit to China has generated extra 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 led several leaders to intervene. to protect their domestic industries.
This has been the case, for example, in France, which has so far had the most favourable outcome within the Community context. As is now the case with Spanish pork, European brandy has also been the subject of research. anti-dumping by the Chinese authorities, an issue that had a direct impact on the French cognac, an emblem of the sector.
Xi Jinping, President of China, and Pedro Sánchez, President of the Government, minutes before signing various trade agreements.
Beijing softened its tone last week and announced that it would not apply provisional tariffs while trade negotiations with Brussels continue. This flexibility came three months after French President Emmanuel Macron spoke with Xi on the matter in Paris. Macron then thanked the Chinese leader for his “open attitude” on the investigation.
Italian Prime Minister Giorgia Meloni has also made a move. At the end of July, Meloni met with Xi and signed a industrial collaboration memorandum which includes electric vehicles and renewable energy. The aim is to strengthen investments in the country’s automotive industry.
