EU-China Trade A Textbook Analysis

EU-China Trade A Textbook Analysis

Josep Borrell is the EU's High Representative for Foreign Affairs and Security Policy and the Vice-President of the European Commission. He offered a frank assessment of the recent EU-China Summit, the first in-person meeting between the senior leaders of the world's second and third biggest economies since 2019. According to Borrell, the quality of the dialogue improved, with both sides recognizing the importance of their relationship and the need to manage their differences.

I was surprised that the first policy area Borrell highlighted in his report was the bilateral trade balance. He noted that the EU's trade deficit with China more than doubled between 2020 and 2022, reaching close to 400 billion euros. In Borrell's view, the China-EU trading relationship has become "critically unbalanced".

I believe Borrell's focus on the bilateral trade balance is misplaced.

Greg Mankiw is a Professor of Economics at Harvard University and author of the classic textbook "Macroeconomics" now in its 11th printing. Mankiw says that, from a macroeconomic perspective, what counts is a country's overall trade position rather than bilateral balances. This is because it is the country's overall balance with all of its trading partners that tells us if a country's savings and investment may be misaligned.

Mankiw uses his own experience to illustrate the difference between bilateral and overall balances in a 2018 New York Times op-ed. It appears that the Trump Administration was also confused on this point.

When Mankiw goes out to dinner, he gets a meal and the the restaurateur receives money. Thus, he runs a deficit with the restaurant. Now, Mankiw would be delighted if the restaurateur bought one of his books to balance the trade but he would be crazy to boycott restaurants that didn't want to add to their collection of economic texts.

Mankiw can run permanent deficits with restaurants because he is in surplus with the New York Times. He receives more from the newspaper for his columns than he pays for his subscription. That's a bilateral trade surplus for him and a bilateral trade deficit for The Times. Nonetheless, they both gain from the relationship.

Mankiw says that if he were to persistently live beyond his means - if the sum of his bilateral deficits exceeded those of his surpluses - that could be problematic. But the problem would be his financial planning, not disreputable trade partners.

According to Mankiw, bilateral trade balances receive more attention than they deserve because international relations are conducted country-to-country and politicians are naturally drawn to bilateral trade statistics. However, most economists believe that bilateral trade balances are not very meaningful.

With Mankiw's folksy example in mind, let's look at the data that Eurostat provides on the EU's goods trade.

Between 2019Q1 and 2021Q2, the EU ran an overall trade surplus. Its bilateral deficits with China and Russia were more than offset by surpluses with the US, the UK, Switzerland and Other countries.

From 2021Q2 to 2022Q2, the EU's imports increased much more rapidly than its exports. According to Eurostat much of the rise in imports came from an increase in the price of energy products.

The EU's deficit with China increased over this period as well. This is because, in the aftermath of the pandemic, the EU's demand recovered more rapidly than its supply, and imports were needed to fill the gap. The EU's deficit with China rose by 51 billion euros. Over the same period, its balance with Other countries shifted from surplus to deficit, a swing of 89 billion euros.

The EU's overall trade deficit began to narrow in 2022Q3. By 2023Q3, it was again running an overall trade surplus. Reflecting these cyclic developments, the EU's deficit with China in the first three quarters of this year was 77 billion euros smaller than the same period a year ago.

The EU's trade imbalance with China is not particularly large. In the last four quarters, it is the equivalent of 2 percent of EU GDP. Indeed, the EU runs much bigger imbalances with Switzerland and the UK. Its surpluses with these countries account for 6 and 4 percent of their GDPs, respectively.

Borrell blamed some of the trade imbalance on "limited market access for foreign companies in China". However, his views seem to be at odds with those of European companies here on the ground.

This summer, the European Chamber of Commerce in China released the latest edition of its business confidence survey. The Chamber found that the public health measures China undertook in the wake of the pandemic did make operations here much more difficult. But foreign firms were not singled out. Indeed, European companies report that they are being treated better and better over time. In the Chamber's most recent survey, 69 percent of the firms said that they were treated at least as well, or even better, than domestic ones. This is up from just 45 percent in 2015.

Given this systematic improvement in the business environment, it is not surprising that supply-chain de-risking is unlikely to result in a significant exodus of European firms.

The Chamber asked its member companies how their supply chains are likely to evolve. Only 0.2 percent of the respondents said that they would fully divest from China. An additional 5 percent said that they would shift some investments from China to other markets. On the other hand, 20 percent of the respondents said that they would further onshore their supply chains into China with an additional 4 percent saying they would fully onshore their supply chains. So, for European firms at least, it appears that supply-chain de-risking could be a net positive for China.

Borrell ends his report on a positive note. He says that China remains a pivotal partner for the EU in addressing many global challenges, including climate, biodiversity, debt, health, and international stability. And he promises that the EU will continue to engage at all levels. That's good news because where there is a will to engage constructively, there is a way to manage differences.

About Yicai Global

Launched in August 2016, Yicai Global is the English-language news service of Yicai Media Group, the financial news arm of Shanghai Media Group, which is one of China's largest state-owned media conglomerates. Focused primarily on China's business world, Yicai Global is dedicated to provide reliable and insightful information and analysis of the economy, finance, tech, startups, and entrepreneurs.

North America and Europe Luxury Interior Fabric Industry Outlook 2024 to 2034

north america and europe luxury interior fabric industry outlook 2024 to 2034

Rising Prospects for Luxury Real Estate Business, Inducing Higher Sales of Luxury Interior Fabric Industry Analysis in North America and Europe, Reach at a US$ 9,524.30 Million by 2034.

The Industry value of luxury interior fabric in North America and Europe is anticipated to rise from US$ 2,684.60 million in 2024 to US$ 9,524.30 million by 2034. The industry is projected to register a robust CAGR of 13.50% over the forecast period.

The growing inclination for a luxurious lifestyle is stimulating the appetite for luxury interior fabrics in developed regions like North America and Europe. The increasing number of consumers opt for brick-and-mortar stores to quality-check luxurious textiles. For this, brands have been investing in the construction of distinct shopping experiences for customers.

Online retailers have been gaining traction, especially post COVID-19. Various value-added services like convenient return policies, cash on delivery, and centralized customer services are top attraction points for online customers.

Surging demand for luxury interior fabric in the commercial sector, particularly in hospitality, healthcare, and cruises, is anticipated to propel product sales. Additionally, the rising investments in home remodeling projects are serving regional growth. This trend is in line with emerging consumer preferences for personalized fabrics in different interior elements like beds, chairs, and other furniture items.

“Key players are finding significant opportunities in North America and Europe, owing to rising customers with high incomes. Players are projected to capture increasing numbers online customers by developing customer-centric websites. With innovations and collection, players are anticipated to reap higher revenues in the next ten years,” says Sneha Verghese, Senior Consultant for Consumer Goods and Products at Future Market Insights.

Latest Developments in the Industry

In September 2023, Kravet Inc. ramped up its manufacturing process by involving its smart fabrics and frames in Quickship program. This development ascertains a 10-day production period for customers. Thereby, supporting budgets, projects, and tight timelines. Kravet Smart collection features +2,000 fabrics and over 150 furniture frames, with personalization options.

In May 2023, Rubelli revealed its customer-oriented website to chart an even more digital future. The new websites are available in three languages, i.e., English, Italian, and French. This move is in line with the digitalization strategy, which has massively advanced in the last two years.

In February 2023, Pierre Frey launched the Braquenié Anniversaire 1823–2023 portfolio celebration of its 200th anniversary. This collection is made of a curated range of upholstery, wallcoverings, and rug designs selected from its wide historical archives.

Deloitte and Nexxiot announce strategic KYX partnership

deloitte and nexxiot announce strategic kyx partnership

Introducing KYX (combining Know Your Client with Know Your Cargo) by Deloitte, powered by Nexxiot. Deloitte, known for its comprehensive range of services, including audit, consulting, financial advisory, risk management, tax, and legal services, is joining forces with Nexxiot, known for its expertise in digitalizing supply chain assets, such as shipping containers and railcars. Nexxiot's network of sensors and artificial intelligence capabilities offer valuable insights into supply chain inefficiencies, reducing uncertainty and operational costs. Deloitte will play a crucial role as the integration partner responsible for delivering these digital transformations.

This strategic partnership will provide a robust, scalable infrastructure rooted in a strong commitment to regulatory excellence and trust. It leverages Deloitte's established KYC (Know Your Client) services and implementation capabilities with Nexxiot's cutting-edge asset intelligence technology and trusted CINFONI (Client Information Network Intelligence) platform. CINFONI has regulatory approval for generating, implementing, recycling, and exchanging 'Golden Records' within the Banking, Financial Services, and Insurance (BFSI) sectors.

Nexxiot CEO, Stefan Kalmund, said, "The strategic partnership with Deloitte and Nexxiot represents a significant step forward for supply chain participants. It will accelerate the adoption of fleet-wide technologies, fostering visibility, transparency, and operational excellence."

Deloitte's James Yearsley, Lead Partner for the Transportation, Hospitality and Services Sector for NSE (North & South Europe), added, "Through this partnership, we aim to set a new global standard for KYX services, benefitting all stakeholders in the logistics sector, including trade finance, banking, and insurance. Deloitte and Nexxiot offer new services based on real-time data, covering all aspects of KYX from door-to-door, internationally."

Deloitte and Nexxiot are committed to enhancing global trade compliance and operational efficiency through this partnership. It offers the logistics industry a means to embrace a future marked by improved efficiency, resilience, and integrity, all made possible by this strategic collaboration.

About Deloitte Managed Services

Deloitte Managed Services is a leading European RegTech Provider of end-to-end managed services for KYC and AML. We combine our extensive expertise with advanced technology, high-quality data and unique mapping intelligence into easy-to-use solutions, no matter which industry or jurisdiction you operate in. We support our customers in the search for new opportunities with clients and third parties. Our solutions protect you and your business against reputational risk and crime.

About Deloitte Consulting AG

This press release has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte Consulting AG accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte Consulting AG is an affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"). Dttl and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see to learn more about our global network of member firms.

About Nexxiot

Nexxiot's mission is to remove uncertainty in the global supply chain, empowering clients to achieve their growth and sustainability goals. Nexxiot provides real-time Asset Intelligence for railcars and shipping containers through its highly reliable hardware, software, and analytics. The technology automatically detects location, shocks, movements, modalities, border crossings, and more. These capabilities enable users to monitor the condition of an asset, automate business processes, and provide new services to stakeholders. Nexxiot has one of the largest device fleets installed globally, with more than one million assets equipped for clients, including Hapag-Lloyd, Knorr-Bremse, VTG, Ermewa, Deutsche Bahn, SBB, and North American railroads. Headquartered in Zurich, Switzerland, Nexxiot has more than 150 engineers and industry experts, serving clients from its offices in Germany, Sweden, and North America. For more information on Nexxiot, visit

Unveiling Exclusive Whiskies for the French Market Oct 2023

unveiling exclusive whiskies for the french market

Taiwan's leading whisky distillery is thrilled to announce its continued presence at this year's Whisky Live Paris (Oct 21- 23), following its return in 2021 after a one-year absence due to the pandemic.

Guests will have the exclusive opportunity to savour whiskies, specially curated for the discerning French market, at the booth this year:

Ms. Aurora Chang, Kavalan Regional Manager, expressed enthusiasm about the French market's resurgence amid the return of social gatherings and on-trade activities.

"Throughout the pandemic, Kavalan strategically boosted sales with cocktails-friendly options like the Kavalan Distillery Select series. Additionally, the premium Solist cask strength whiskies addressed supply challenges in the Japanese whisky market. As we approach the final stages of our Third Maturation Warehouse, reflecting our dedication to quality and expansion, Kavalan stands ready and optimistic about meeting the growing global demands."

This year, the Kavalan booth features a captivating centerpiece that embodies the brand's distinct character, enhanced by vibrant pink orchids. A batten wall, inspired by Taiwanese windows, paired with a lush green roof mirroring Yilan County's natural beauty, and complemented by exquisite woodwork, all symbolize the quality of Kavalan's oak casks.

Mr. Didier Ghorbanzadeh, Global Ambassador for Kavalan's European distributor La Maison du Whisky (LMDW), affirms that Kavalan spares no effort in crafting a world-class single malt that confidently stands on par with the most renowned distilleries.

"When experiencing Kavalan's whiskies for the first time, the surprising maturity, despite its youth, is attributed to the unique tropical aging conditions in Taiwan. This distinct characteristic sets it apart from the single malts we already distribute in Europe."

Didier highlighted that Europeans are taken aback by the intensity, depth, and vibrant fruit flavours found in Kavalan.

"While diverse oak influences (sherry, wine, etc.) are beautifully expressed with intense aromas, Kavalan is distinct for its explosive tropical fruit flavours on the midpalate and finish, offering refreshing purity to balance the oak's influence."

LMDW seeks to boost Kavalan's on-field presence by offering tastings and masterclasses at events such as Whisky Live Paris, The Whisky Show London, and The Whisky Show Budapest, showcasing Taiwan's unique whisky to an expansive global audience.

About Kavalan Distillery

Kavalan Distillery in Yilan County has been pioneering the art of single malt whisky in Taiwan since 2005. Our whisky, aged in intense humidity and heat, sources the meltwaters of Snow Mountain and is enhanced by sea and mountain breezes. All this combines to create Kavalan's signature creaminess. Taking Yilan County's old name, our distillery is backed by about 40 years of beverage-making under parent company, King Car Group. We have collected more than 790 gold awards or higher from the industry's most competitive contests. Visit

About La Maison du Whisky

Founded in 1956, La Maison du Whisky transitioned from a simple retailer to a global distributor of whiskies and spirits. With its Singapore subsidiary and LM&V joint venture, it represents over 250 brands, spanning from whisky to tequila. They offer a vast collection of over 4,000 products online and in-store. Their ventures also include Fine Spirits Auction for collectors and The Avant Gardist (TAG) spotlighting innovative brands. Committed to expanding their industry knowledge, they provide training, host the Whisky Live Paris event, and have been publishing resources like Whisky Magazine since 2004.