CHINA AND THE EU BILATERAL TRADE AND INVESTMENTS GOVERNANCE INSTITUTE

Transcription

1 CHINA AND THE EU BILATERAL TRADE AND INVESTMENTS GOVERNANCE INSTITUTE 2017

2 Contents Introduction... 4 EU & China: Bilateral Trade... 6 Austria... 6 Belgium Bulgaria Croatia Cyprus The Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden

3 United Kingdom Chinese companies in Europe Geographical distribution Chinese investments in CEE Data Individual Countries Chinese FDI Hungary, Poland, Czech Republic, Romania, Bulgaria, Slovakia Hungary Poland Czech Republic Bulgaria Romania Slovakia Chinese investments in CEE Conclusion References The Sources of the Statistical Data The Sources of Demographic and Economic Data Sources for the part Chinese Investments in the EU

4 Introduction China is the EU's biggest source of imports and has also become one of the EU's fastest growing export markets with the EU now China s biggest source of imports. China and Europe now trade well over 1 billion a day. EU imports from China are dominated by industrial and consumer goods with bilateral trade in services amounting to just one tenth of total trade in goods. Of the EU's exports to China, only 20% are of services. The study will focus on each country separately. The purpose of this study is to provide an overview of mutual business cooperation between European Union and China including the investment policy. EU trade with China is a project which includes 28 countries of European Union, which are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and United Kingdom. Each member of EU will be given a brief one-page summary regarding their business cooperation with China. All the countries will be briefly summarized with regard to several demographic and economic indicators such as: population, capital city, currency, unemployment, GDP per capita (PPP) 1, exports, natural resources, agricultural products and industries of each country. Then the two main questions will be examined: 1) What is the state of import on cooperation with China and on China CEE initiative in their country? 2) What is the real situation of Chinese export in each country? 3) What is the situation of Chinese FDI in the CEE countries? The last part of the study will be a conclusion with basic recommendations for import and export in each country with China, and conclusion and recommendations for further steps towards the Chinese FDI in CEE countries, and Czech Republic more specifically. Methods and definitions Data on trade in goods presented in this News Release are based on data available on 20 December 2016 in Eurostat. These are provisional figures based on information provided by Member States. They are subject to frequent revision for up to two years after the year in question. Furthermore, national concepts may differ from the harmonized methodology used by Eurostat, leading to differences between figures in this release and those published nationally. Products are classified according to the Standard international trade classification (SITC). For the part on Chinese FDI in the Central and Eastern Europe, the data from the Ministry of Commerce of the People's Republic of China (MOFCOM), and the Statistical bulletin of China's outward foreign direct investments 2014 were used. It is the only known source that completely compile the data for 1 GDP - per capita (PPP) compares GDP on a purchasing power parity basis divided by population 4

5 the Chinese FDI in CEE, and is used in reports worldwide. However, MOFCOM data are underreported, as they do not include investments, that were too small to need approval or authorization by MOFCOM. The data from Eurostat were incomplete for the period monitored in this report, and were not used. Another European source of the data of FDI are National Banks of the respective countries. Their reports often differed a lot from the data of MOFCOM, mostly by showing visible fluctuations between positive as well as negative directions. The main reasons for this are due to the complexities of tracking, and distinct factors used in the tracking. 5

6 EU & China: Bilateral Trade Austria Economy and Demographics Austria, with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a relatively sound industrial sector, and a small, but highly developed agricultural sector. Economic growth has been relatively weak in recent years, approaching 0.9% in Austria's 5.8% unemployment rate, while low by European standards, is at its highest rate since the end of World War II, driven by an increased number of refugees and EU migrants entering the labor market. Without extensive vocational training programs and generous early retirement, the unemployment rate would be even higher. Although Austria's fiscal position compares favorably with other euro-zone countries, it faces several external risks, such as unexpectedly weak world economic growth threatening the export market, Austrian banks' continued exposure to Central and Eastern Europe, repercussions from the Hypo Alpe Adria bank collapse, political and economic uncertainties caused by the European sovereign debt crisis, the current refugee crisis, and continued unrest in Russia/Ukraine. Early signs point towards a slight improvement in 2016, driven by low interest rates on government debt. Currently, the budget deficit stands at 2.7% of GDP and public debt has reached a post-war high of 84.2% of the GDP. Figure1: Map of Austria in Europe 6

7 Population 8,711,770 (2016 est.) Capital city Vienna Currency euro (EUR) Unemployment 5.7% GDP Per Capita USD Exports USD billion (2015 est.) Exports - commodities: machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel, textiles, foodstuffs Exports - partners: Germany 29.4%, US 6.4%, Italy 6.1%, Switzerland 5.7%, France 4.4%, Slovakia 4.2% Figure 2: Exports partners in Austria Imports 140 USD billion (2015 est.) Imports - commodities: machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products, natural gas; foodstuffs Imports - partners: Germany 41.5%, Italy 6.3%, Switzerland 6%, Czech Republic 4.2% 7

8 Figure 3: Imports partners in Austria Figure 4: Development of Austria exports and imports with China 8

9 Figure 5: Imports of Austria in products with China Figure 6: Exports of Austria in products with China 9

10 Belgium Economy and Demographics This modern, open, and private-enterprise-based economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north. With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to shifts in foreign demand, particularly with Belgium s EU trade partners. Roughly three-quarters of Belgium's trade is with other EU countries. In 2015, Belgian GDP grew by 1.4%, the unemployment rate stabilized at 8.6%, and the budget deficit was 2.7% of GDP. Prime Minister Charles MICHEL's center-right government has pledged to further reduce the deficit in response to EU pressure to reduce Belgium's high public debt, which remains above 100% of GDP, but such efforts could also dampen economic growth. In addition to restrained public spending, low wage growth and high unemployment promise to curtail a more robust recovery in private consumption. The government has pledged to pursue a reform program to improve Belgium s competitiveness, including changes to tax policy, labor market rules, and welfare benefits. These changes risk worsening tensions with trade unions and triggering extended strikes. Figure 7: Map of Belgium in Europe Population Capital city Currency 11,409,077 (2016 est.) Brussels euro (EUR) 10

11 Unemployment 8.5% GDP Per Capita 43,600 USD Exports USD billion (2015 est.) Exports - commodities: chemicals, machinery and equipment, finished diamonds, metals and metal products, foodstuffs Exports - partners: Germany 16.9%, France 15.5%, Netherlands 11.4%, UK 8.8%, US 6%, Italy 5% Figure 8: Exports partners in Belgium Imports USD billion (2015 est.) Imports - commodities: raw materials, machinery and equipment, chemicals, raw diamonds, pharmaceuticals, foodstuffs, transportation equipment, oil products Imports - partners: Netherlands 16.7%, Germany 12.7%, France 9.6%, US 8.7%, UK 5.1%, Ireland 4.7%, China 4.3% 11

12 Figure 9: Imports partners in Belgium Figure 10: Development of Belgium exports and imports with China 12

13 Figure 11: Import of Belgium in products with China Figure 12: Exports of Belgium in products with China 13

14 Bulgaria Economy and Demographics Bulgaria, a former communist country that entered the EU on 1 January 2007, averaged more than 6% annual growth from 2004 to 2008, driven by significant amounts of bank lending, consumption, and foreign direct investment. Successive governments have demonstrated a commitment to economic reforms and responsible fiscal planning, but the global downturn sharply reduced domestic demand, exports, capital inflows, and industrial production. GDP contracted by 5.5% in 2009, and has been slow to recover in the years since. Despite a favorable investment regime, including low, flat corporate income taxes, significant challenges remain. Corruption in public administration, a weak judiciary, and the presence of organized crime continue to hamper the country's investment climate and economic prospects. 14

15 Figure 13: Map of Bulgaria in Europe Population 7,144,653 (2016 est.) Capital city Sofia Currency lev (BGN) Unemployment 10.1% GDP Per Capita 19,100 USD Exports USD billion (2015 est.) Exports - commodities: clothing, footwear, iron and steel, machinery and equipment, fuels Exports - partners: Germany 12.5%, Italy 9.2%, Turkey 8.5%, Romania 8.2%, Greece 6.5%, France 4.2% 15

16 Figure 14: Exports partners in Bulgaria Imports USD billion (2015 est.) Imports - commodities: machinery and equipment; metals and ores; chemicals and plastics; fuels, minerals, and raw materials Imports - partners: Germany 12.9%, Russia 12%, Italy 7.6%, Romania 6.8%, Turkey 5.7%, Greece 4.8%, Spain 4.8% Figure 15: Imports partners in Bulgaria Figure 16: Development of Bulgaria exports and imports with China 16

17 Figure 17: Imports of Bulgaria in products with China Figure 18: Exports of Bulgaria in products with China 17

18 Croatia Economy and Demographics Though still one of the wealthiest of the former Yugoslav republics, Croatia's economy suffered badly during the war. The country's output during that time collapsed, and Croatia missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall. Between 2000 and 2007, however, Croatia's economic fortunes began to improve with moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-driven consumer spending. Inflation over the same period remained tame and the currency, the kuna, stable. Croatia experienced an abrupt slowdown in the economy in 2008 and has yet to recover; economic growth was stagnant or negative in each year since Difficult problems still remain including a stubbornly high unemployment rate, uneven regional development, and a challenging investment climate. Croatia continues to face reduced foreign investment. 18

19 Figure 19: Map of Croatia in Europe Population 4,313,707 (2016 est.) Capital city Zagreb Currency kuna (HRK) Unemployment 17.1% GDP Per Capita 21,600 USD Exports USD billion (2015 est.) Exports - commodities: transport equipment, machinery, textiles, chemicals, foodstuffs, fuels Exports - partners: Italy 13.4%, Slovenia 12.5%, Germany 11.4%, Bosnia and Herzegovina 9.9%, Austria 6.6%, Serbia 4.9% 19

20 Figure 20: Exports partners in Croatia Imports USD billion (2015 est.) Imports - commodities: machinery, transport and electrical equipment; chemicals, fuels and lubricants; foodstuffs Imports - partners: Germany 15.5%, Italy 13.1%, Slovenia 10.7%, Austria 9.2%, Hungary 7.8% Figure 21: Imports partners in Croatia 20

21 Figure 22: Development of Croatia exports and imports with China Figure 23: Imports of Croatia in products with China 21

22 Figure 24: Exports of Croatia in products with China 22

23 Cyprus Economy and Demographics Even though the whole of the island is part of the EU, implementation of the EU "acquis communautaire" has been suspended in the area administered by Turkish Cypriots, known locally as the "Turkish Republic of Northern Cyprus" ("TRNC"), until political conditions permit the reunification of the island. The market-based economy of the "TRNC" is roughly one-fifth the size of its southern neighbor and is likewise dominated by the service sector with a large portion of the population employed by the government. In the latest year for which data are available - the services sector, which includes the public sector, trade, tourism, and education, contributed 58.7% to economic output. In the same year, light manufacturing and agriculture contributed 2.7% and 6.2%, respectively. Manufacturing is limited mainly to food and beverages, furniture and fixtures, construction materials, metal and non-metal products, textiles and clothing. The TRNC maintains few economic ties with the Republic of Cyprus outside of trade in construction materials. Since its creation, the "TRNC" has heavily relied on financial assistance from Turkey, which supports the "TRNC" defense, telecommunications, water and postal services. The Turkish Lira is the preferred currency, though foreign currencies are widely accepted in business transactions. Figure 25: Map of Cyprus in Europe Population 1,205,575 (2016 est.) Capital city Nicosia Currency euro (EUR) Unemployment 14.9% GDP Per Capita 32,800 USD 23

24 Exports USD billion (2015 est.) Exports - commodities: citrus, potatoes, pharmaceuticals, cement, clothing Exports - partners: Greece 10.9%, Ireland 10.2%, UK 7.2%, Israel 6% Figure 26: Exports partners in Cyprus Imports USD billion (2015 est.) Imports - commodities: consumer goods, petroleum and lubricants, machinery, transport equipment Imports - partners: Greece 25.7%, UK 9.1%, Italy 8%, Germany 7.5%, Israel 5.5%, China 4.8%, Netherlands 4.1% Figure 27: Imports partners in Cyprus 24

25 Figure 28: Development of Cyprus exports and imports with China Figure 29: Imports of Cyprus in products with China 25

26 Figure 30: Exports of Cyprus in products with China 26

27 The Czech Republic Economy and Demographics The Czech Republic is a stable and prosperous market economy that is closely integrated with the EU, especially since the country's EU accession in The auto industry is the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell sharply in The economy slowly recovered in the second half of 2009 and registered weak growth in the next two years. In 2012 and 2013, however, the economy fell into a recession again, due both to a slump in external demand in the EU and to the government s austerity measures, returning to weak growth in 2014, and stronger growth in Figure 31: Map of Czech Republic in Europe Population 10,644,842 (2016 est.) Capital city Prague Currency koruna (CZK) Unemployment 6.5% GDP Per Capita 31,600 USD 27

28 Exports 131 USD billion (2015 est.) Exports - commodities: machinery and transport equipment, raw materials, fuel, chemicals Exports - partners: Germany 32.4%, Slovakia 9%, Poland 5.8%, UK 5.3%, France 5.1%, Austria 4.1% Figure 32: Export partners in Czech Republic Imports USD billion (2015 est.) Imports - commodities: machinery and transport equipment, raw materials and fuels, chemicals Imports - partners: Germany 30%, Poland 9%, China 8.3%, Slovakia 6.6%, Netherlands 5%, Austria 4.1% Figure 33: Imports partners in Czech Republic 28

29 Figure 34: Development of Czech Republic exports and imports with China Figure 35: Imports of Czech Republic in products with China,

30 Figure 36: Export Czech Republic in products with China,

31 Denmark Economy and Demographics This thoroughly modern market economy features a high-tech agricultural sector, advanced industry with world-leading firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a net exporter of food, oil, and gas and enjoys a comfortable balance of payments surplus, but depends on imports of raw materials for the manufacturing sector. Danes enjoy a high standard of living and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. An aging population will be a major long-term issue. Denmark is a member of the EU; Danish legislation and regulations conform to EU standards on almost all issues. Despite previously meeting the criteria to join the European Economic and Monetary Union, Denmark has negotiated an opt-out with the EU and is not required to adopt the euro. Within the EU, Denmark is among the strongest supporters of trade liberalization. Figure 37: Map of Denmark in Europe Population 5,724,456 (2016 est.) Capital city Copenhagen Currency Danish krone (DKK) Unemployment 4.6% GDP Per Capita 45,700 USD 31

32 Exports USD billion (2015 est.) Exports - commodities: machinery and instruments, meat and meat products, dairy products, fish, pharmaceuticals, furniture, windmills Exports - partners: Germany 17.8%, Sweden 11.6%, US 8.4%, Norway 6.3%, UK 6.3%, Netherlands 4.4%, China 4.2% Figure 38: Exports partners in Denmark Imports USD billion (2015 est.) Imports - commodities: machinery and equipment, raw materials and semi manufactures for industry, chemicals, grain and foodstuffs, consumer goods Imports - partners: Germany 20.4%, Sweden 12.3%, Netherlands 8.1%, China 7.3%, Norway 6.1%, UK 4.4% Figure 39: Imports partners in Denmark 32

33 Figure 40: Development of Denmark exports and imports with China Figure 41: Imports of Denmark in products with China 33

34 Figure 42: Exports of Denmark in products with China 34

35 Estonia Economy and Demographics Estonia, a member of the EU since 2004 and the euro zone since 2011, has a modern market-based economy and one of the higher per capita income levels in Central Europe and the Baltic region. Estonia's successive governments have pursued a free market, pro-business economic agenda, and sound fiscal policies that have resulted in balanced budgets and low public debt. The economy benefits from strong electronics and telecommunications sectors and strong trade ties with Finland, Sweden, and Germany. After two years of robust recovery in 2011 and 2012, the Estonian economy faltered in 2013 with only 1.6% GDP growth, mainly due to continuing recession in much of the EU. GDP growth in 2014 was 2.9% but dropped to 1.2% in 2015 due to lower demand in key Scandinavian export markets. GDP growth is expected to be about 2.2% in Estonia is challenged by a shortage of labor, both skilled and unskilled, although the government has amended its immigration law to allow easier hiring of highly qualified foreign workers. Figure 43: Map of Estonia in Europe Population 1,258,545 (July 2016 est.) Capital city Tallinn Currency euro (EUR) Unemployment 6.2% GDP Per Capita 28,600 USD 35

36 Exports USD billion (2015 est.) Exports - commodities: machinery and electrical equipment 34%, food products and beverages 9%, mineral fuels 9%, wood and wood products 10%, metals 7%, furniture 9%, vehicles and parts 6%, chemicals 5% Exports - partners: Sweden 18.8%, Finland 16%, Latvia 10.4%, Russia 6.7%, Lithuania 5.9%, Germany 5.2%, Norway 4.1% Figure 44: Exports partners in Estonia Imports USD billion (2015 est.) Imports - commodities: machinery and electrical equipment 28 %, mineral fuels 11%, food and food products 10%, vehicles 9%, chemical products 8%, metals 8% Imports - partners: Finland 14.5%, Germany 11%, Lithuania 9%, Sweden 8.5%, Latvia 8.3%, Poland 7.4%, Russia 6.1%, Netherlands 5.5%, China 4.8% Figure 45: Imports partners in Estonia 36

37 Figure 46: Development of Estonia exports and imports with China Figure 47: Imports of Estonia in products with China 37

38 Figure 48: Exports of Estonia in products with China 38

39 Finland Economy and Demographics Finland has a highly industrialized, largely free-market economy with per capita GDP almost as high as that of Austria, Belgium, the Netherlands, or Sweden. Trade is important, with exports accounting for over one-third of GDP in recent years. Finland is historically competitive in manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in export of technology for mobile phones as well as promotion of startups in the information and communications technology, gaming, cleantech, and biotechnology sectors. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the cold climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export industry, provides a secondary occupation for the rural population. Finland had been one of the best performing economies within the EU before 2009 and its banks and financial markets avoided the worst of global financial crisis. Figure 49: Map of Finland in Europe Population 5,498,211 (July 2016 est.) Capital city Helsinki Currency euro (EUR) Unemployment 4.6% GDP Per Capita 45,700 USD 39

40 Exports USD billion (2015 est.) Exports - commodities: machinery and instruments, meat and meat products, dairy products, fish, pharmaceuticals, furniture, windmills Exports - partners: Germany 17.8%, Sweden 11.6%, US 8.4%, Norway 6.3%, UK 6.3%, Netherlands 4.4%, China 4.2% Figure 50: Exports partners in Finland Imports USD billion (2015 est.) Imports - commodities: machinery and equipment, raw materials and semi manufactures for industry, chemicals, grain and foodstuffs, consumer goods Imports - partners: Germany 20.4%, Sweden 12.3%, Netherlands 8.1%, China 7.3%, Norway 6.1%, UK 4.4% Figure 51: Imports partners in Finland 40

41 Figure 52: Development of Finland exports and imports with China Figure 53: Imports of Finland in products with China 41

42 Figure 54: Exports of Finland in products with China 42

43 France Economy and Demographics The French economy is diversified across all sectors. The government has partially or fully privatized many large companies, including Air France, France Telecom, Renault, and Thales. However, the government maintains a strong presence in some sectors, particularly power, public transport, and defense industries. With more than 84 million foreign tourists per year, France is the most visited country in the world and maintains the third largest income in the world from tourism. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that mitigate economic inequality. France's real GDP increased by 1.1% in The unemployment rate (including overseas territories) increased from 7.8% in 2008 to 9.9% in the fourth quarter of Youth unemployment in metropolitan France decreased from a high of 25.4% in the fourth quarter of 2012 to 24.3% in the fourth quarter of Figure 55: Map of France in Europe Population 62,814,233 (July 2016 est.) Capital city Paris Currency euro (EUR) Unemployment 10.1% GDP Per Capita 41,200 USD 43

44 Exports USD billion (2015 est.) Exports - commodities: machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages Exports - partners: Germany 15.9%, Spain 7.3%, US 7.2%, Italy 7.1%, UK 7.1%, Belgium 6.8% Figure 56: Exports partners in France Imports USD billion (2015 est.) Imports - commodities: machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals Imports - partners: Germany 19.5%, Belgium 10.7%, Italy 7.7%, Netherlands 7.5%, Spain 6.8%, US 5.5%, China 5.4%, UK 4.3% Figure 57: Imports partners in France 44

45 Figure 58: Development of France exports and imports with China Figure 59: Imports of France in products with China 45

46 Figure 60: Exports of France in products with China 46

47 Germany Economy and Demographics The German economy - the fifth largest economy in the world in (PPP) 2 terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force. Like its Western European neighbors, Germany faces significant demographic challenges to sustained long-term growth. The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros during , largely in infrastructure, is intended to spur needed private investment. Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by Germany plans to replace nuclear power largely with renewable energy, which accounted for 27.8% of gross electricity consumption in 2014, up from 9% in Before the shutdown of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production. Domestic consumption, bolstered by low energy prices and a weak euro, are likely to drive German GDP growth again in Figure 61: Map of Germany in Europe Population Capital city Currency 80,722,792 (July 2016 est.) Berlin euro (EUR) 2 GDP - per capita (PPP) compares GDP on a purchasing power parity basis divided by population 47

48 Unemployment 4.6% GDP Per Capita 46,900 USD Exports USD trillion (2015 est.) Exports - commodities: motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products Exports - partners: US 9.6%, France 8.6%, UK 7.5%, Netherlands 6.6%, China 6%, Italy 4.9%, Austria 4.8%, Poland 4.4%, Switzerland 4.2% Figure 62: Exports partners in Germany Imports USD trillion (2015 est.) Imports - commodities: machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products Imports - partners: Netherlands 13.7%, France 7.6%, China 7.3%, Belgium 6%, Italy 5.2%, Poland 5%, US 4.7%, Czech Republic 4.5%, UK 4.2%, Austria 4.2%, Switzerland 4.2% 48

49 Figure 63: Imports partners in Germany Figure 64: Development of Germany exports and imports with China 49

50 Figure 65: Imports of Germany in products with China Figure 66: Exports of Germany in products with China 50

51 Greece Economy and Demographics Greece has a capitalist economy with a public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 18% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy averaged growth of about 4% per year between 2003 and 2007, but the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit. By 2013 the economy had contracted 26%, compared with the pre-crisis level of Greece met the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP in , but violated it in 2009, with the deficit reaching 15% of GDP. Deteriorating public finances, inaccurate and misreported statistics, and consistent underperformance on reforms prompted major credit rating agencies to downgrade Greece's international debt rating in late 2009 and led the country into a financial crisis. Under intense pressure from the EU and international market participants, the government accepted a bailout program that called on Athens to cut government spending, decrease tax evasion, overhaul the civil-service, healthcare, and pension systems, and reform the labor and product markets. Austerity measures reduced the deficit to 3% in Figure 67: Map of Greece in Europe Population Capital city Currency 10,773,253 (July 2016 est.) Athens euro (EUR) 51

52 Unemployment 25% GDP Per Capita 26,400 USD Exports 27.5 USD billion (2015 est.) Exports - commodities: food and beverages, manufactured goods, petroleum products, chemicals, textiles Exports - partners: Italy 11.2%, Germany 7.3%, Turkey 6.6%, Cyprus 5.9%, Bulgaria 5.2%, US 4.8%, UK 4.2%, Egypt 4% Figure 68: Exports partners in Greece Imports USD billion (2015 est.) Imports - commodities: machinery, transport equipment, fuels, chemicals Imports - partners: Germany 10.7%, Italy 8.4%, Russia 7.9%, Iraq 7%, China 5.9%, Netherlands 5.5%, France 4.5% 52

53 Figure 69: Imports partners in Greece Figure 70: Development of Greece exports and imports with China Figure 71: Imports of Greece in products with China 53

54 Figure 72: Exports of Greece in products with China 54

55 Hungary Economy and Demographics Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the EU-28 average. In late 2008, Hungary's impending inability to service its short-term debt - brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-arranged financial assistance package worth over $25 billion. The global economic downturn, declining exports, and low domestic consumption and investment, dampened by government austerity measures, resulted in a severe economic contraction in In 2010, the new government implemented a number of changes including cutting business and personal income taxes, but imposed "crisis taxes" on financial institutions, energy and telecom companies, and retailers. The IMF/EU bailout program lapsed at the end of 2010 and was replaced by Post Program Monitoring and Article IV Consultations on overall economic and fiscal processes. At the end of 2011 the government turned to the IMF and the EU to obtain a financial backstop to support its efforts to refinance foreign currency debt and bond obligations in 2012 and beyond, but Budapest's rejection of EU and IMF economic policy recommendations led to a breakdown in talks with the lenders in late Global demand for high yield has since helped Hungary to obtain funds on international markets. Figure 73: Map of Hungary in Europe Population Capital city Currency 9,874,784 (July 2016 est.) Budapest Hungarian forint (HUF) 55

56 Unemployment 6.8% GDP Per Capita 26,200 USD Exports USD billion (2015 est.) Exports - commodities: machinery and equipment 53.5%, other manufactures 31.2%, food products 8.7%, raw materials 3.4%, fuels and electricity 3.9% Exports - partners: Germany 28%, Romania 5.4%, Slovakia 5.1%, Austria 5%, Italy 4.8%, France 4.7%, UK 4%, Czech Republic 4% Figure 74: Exports partners in Hungary Imports 84.7 USD billion (2015 est.) Imports - commodities: machinery and equipment 45.4%, other manufactures 34.3%, fuels and electricity 12.6%, food products 5.3%, raw materials 2.5% Imports - partners: Germany 25.8%, China 6.7%, Austria 6.6%, Poland 5.5%, Slovakia 5.3%, France 5%, Czech Republic 4.8%, Netherlands 4.6%, Italy 4.5% 56

57 Figure 75: Imports partners in Hungary Figure 76: Development of Hungary exports and imports with China 57

58 Figure 77: Imports of Hungary in products with China Figure 78: Exports of Hungary in products with China 58

59 Ireland Economy and Demographics Ireland is a small, modern, trade-dependent economy. Ireland was among the initial group of 12 EU nations that began circulating the euro on 1 January GDP growth averaged 6% in , but economic activity dropped sharply during the world financial crisis and the subsequent collapse of its domestic property market and construction industry. Faced with sharply reduced revenues and a burgeoning budget deficit from efforts to stabilize its fragile banking sector, the Irish Government introduced the first in a series of draconian budgets in These measures were not sufficient to stabilize Ireland s public finances. In 2010, the budget deficit reached 32.4% of GDP - the world's largest deficit, as a percentage of GDP. In late 2010, the former COWEN government agreed to a $92 billion loan package from the EU and IMF to help Dublin recapitalize Ireland s banking sector and avoid defaulting on its sovereign debt. In March 2011, the KENNY government intensified austerity measures to meet the deficit targets under Ireland's EU-IMF bailout program. 59

60 Figure 79: Map of Ireland in Europe Population 4,952,473 (July 2016 est.) Capital city Dublin Currency euro (EUR) Unemployment 9.4% GDP Per Capita 55,500 USD Exports USD billion (2015 est.) Exports - commodities: machinery and equipment, computers, chemicals, medical devices, pharmaceuticals; foodstuffs, animal products Exports - partners: US 23.7%, UK 13.8%, Belgium 13.2%, Germany 6.6%, Switzerland 5.5%, Netherlands 4.4%, France 4.4% 60

61 Figure 80: Exports partners in Ireland Imports USD billion (2015 est.) Imports - commodities: data processing equipment, other machinery and equipment, chemicals, petroleum and petroleum products, textiles, clothing Imports - partners: UK 32.5%, US 14%, France 10.2%, Germany 9.3%, Netherlands 4.9%, China 4.1% Figure 81: Imports partners in Ireland Figure 82: Development of Ireland exports and imports with China 61

62 Figure 83: Imports of Ireland in products with China Figure 84: Exports of Ireland in products with China 62

63 Italy Economy and Demographics Italy has a diversified economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, highly subsidized, agricultural south, where unemployment is higher. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 17% of GDP. These activities are most common within the agriculture, construction, and service sectors. Italy is the thirdlargest economy in the euro zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets. Public debt has increased steadily since 2007, topping 135% of GDP in 2015, but investor concerns about Italy and the broader euro-zone crisis eased in 2013, bringing down Italy's borrowing costs on sovereign government debt from euroera records. Figure 85: Map of Italy in Europe Population 62,007,540 (July 2016 est.) Capital city Rome Currency euro (EUR) Unemployment 11.9% GDP Per Capita 35,700 USD 63

64 Exports USD billion (2015 est.) Exports - commodities: engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; foodstuffs, beverages, and tobacco; minerals, nonferrous metals Exports - partners: Germany 12.3%, France 10.3%, US 8.7%, UK 5.4%, Spain 4.8%, Switzerland 4.7% Figure 86: Exports partners in Italy Imports USD billion (2015 est.) Imports - commodities: engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing; food, beverages, tobacco Imports - partners: Germany 15.4%, France 8.7%, China 7.7%, Netherlands 5.6%, Spain 5%, Belgium 4.7% Figure 87: Imports partners in Italy 64

65 Figure 88: Development of Italy exports and imports with China Figure 89: Imports of Italy in products with China 65

66 Figure 90: exports of Italy in products with China 66

67 Latvia Economy and Demographics Latvia is a small, open economy with exports contributing nearly a third of GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronics industries. Corruption continues to be an impediment to attracting foreign direct investment and Latvia's low birth rate and decreasing population are major challenges to its long-term economic vitality. Latvia's economy experienced GDP growth of more than 10% per year during , but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the softening world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in The economy has not returned to pre-crisis levels despite strong growth, especially in the export sector in Figure 91: Map of Latvia in Europe Population 1,965,686 (July 2016 est.) Capital city Riga Currency euro (EUR) Unemployment 9.9% GDP Per Capita 24,700 USD Exports 11.4 USD billion (2015 est.) Exports - commodities: foodstuffs, wood and wood products, metals, machinery and equipment, textiles 67

68 Exports - partners: Lithuania 17.8%, Russia 11.5%, Estonia 11.1%, Germany 6.3%, Poland 5.6%, Sweden 5.2%, UK 5%, Denmark 4% Figure 92: Exports partners in Latvia Imports USD billion (2015 est.) Imports - commodities: machinery and equipment, consumer goods, chemicals, fuels, vehicles Imports - partners: Lithuania 16.9%, Germany 11.2%, Poland 10.5%, Russia 8.1%, Estonia 7.7%, Finland 5.2%, Netherlands 4% Figure 93: Imports partners in Latvia 68

69 Figure 94: Development of Latvia exports and imports with China Figure 95: Imports of Latvia in products with China 69

70 Figure 96: Exports of Latvia in products with China 70

71 Lithuania Economy and Demographics Lithuania gained membership in the WTO in May 2001 and joined the EU in May Lithuania's trade with the EU and CIS countries accounts for approximately 87.3% of total trade. Foreign investment and EU funding have aided in the transition from the former planned economy to a market economy. The three former Soviet Baltic republics were severely hit by the financial crisis, but Lithuania has rebounded and become one of the fastest growing economies in the EU. Lithuania s ongoing recovery hinges on export growth, which is being hampered by economic slowdowns in the EU and Russia. Lithuania joined the euro zone on 1 January 2015 and is under review for membership in the OECD. Figure 97: Map of Lithuania in Europe Population 2,854,235 (July 2016 est.) Capital city Vilnius Currency euro (EUR) Unemployment 9.1% GDP Per Capita 28,400 USD 71

72 Exports USD billion (2015 est.) Exports - commodities: refined fuel, machinery and equipment, chemicals, textiles, foodstuffs, plastics Exports - partners: Russia 13.7%, Latvia 9.8%, Poland 9.7%, Germany 7.8%, Estonia 5.3%, Belarus 4.6%, UK 4.5%, US 4.4%, Netherlands 4% Figure 98: Exports partners in Lithuania Imports USD billion (2015 est.) Imports - commodities: oil, natural gas, machinery and equipment, transport equipment, chemicals, textiles and clothing, metals Imports - partners: Russia 16.9%, Germany 11.5%, Poland 10.3%, Latvia 7.6%, Netherlands 5.1%, Italy 4.5% Figure 99: Imports partners in Lithuania 72

73 Figure 100: Development of Lithuania exports and imports with China Figure 101: Imports of Lithuania in products with China 73

74 Figure 102: Exports of Lithuania in products with China 74

75 Luxembourg Economy and Demographics This small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, machinery and equipment, rubber, automotive components, and other products. The financial sector, which accounts for about 36% of GDP, is the leading sector in the economy. The economy depends on foreign and cross-border workers for about 39% of its labor force. Luxembourg experienced uneven economic growth in the aftermath of the global economic crisis that began in late Luxembourg's GDP contracted 3.6% in 2009, rebounded in , fell again in , but recovered in Unemployment has remained below the EU average despite having increased from a historically low rate of 4% in the 2000s to 7.1% in The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world and is the highest in the euro zone. Luxembourg has one of the highest current account surpluses as a share of GDP in the euro zone, and it maintains a healthy budgetary position and the lowest public debt level in the region. Figure 103: Map of Luxembourg Population 582,291 (July 2016 est.) Capital city Luxembourg Currency euro (EUR) Unemployment 6.9% GDP Per Capita 99,000 USD 75

76 Exports USD billion (2015 est.) Exports - commodities: machinery and equipment, steel products, chemicals, rubber products, glass Exports - partners: Germany 22.1%, Belgium 16.7%, France 16.6%, UK 4.7%, Italy 4.6%, Netherlands 4% Figure 104: exports partners in Luxembourg Imports USD billion (2015 est.) Imports - commodities: commercial aircraft, minerals, chemicals, metals, foodstuffs, luxury consumer goods Imports - partners: Belgium 27.6%, Germany 22.9%, China 11.7%, France 9.5%, US 8.4%, Netherlands 4.2%, Mexico 4.1% Figure 105: Imports partners of Luxembourg 76

77 Figure 106: Development of Luxembourg exports and imports with China Figure 107: Imports of Luxembourg in products with China 77

78 Figure 108: Exports of Luxembourg in products with China Malta Economy and Demographics Malta - the smallest economy in the euro zone - produces only about 20% of its food needs, has limited fresh water supplies, and has few domestic energy sources. Malta's economy is dependent on foreign 78

79 trade, manufacturing, and tourism. Malta joined the EU in 2004 and adopted the euro on 1 January Malta has weathered the euro-zone crisis better than most EU member states due to a low debt-to- GDP ratio and financially sound banking sector. It has low unemployment relative to other European countries, and growth has recovered since the 2009 recession. In 2014 and 2015, Malta led the euro zone in growth, expanding by nearly 3.5% each year. Malta s services sector continued to grow in 2015, with noted increases in the financial services and online gaming sectors. Malta continues to enhance its regulation of the financial services sector, and passed additional legislation in 2014 and 2015 to improve anti-money laundering oversight for financial and gaming activities Figure 109: Map of Malta in Europe Population 415,196 (July 2016 est.) Capital city Valletta Currency euro (EUR) Unemployment 5.4% GDP Per Capita 35,900 USD Exports USD billion (2015 est.) Exports - commodities: machinery and mechanical appliances; mineral fuels, oils and petroleum products; pharmaceutical products; books and newspapers; aircraft/spacecraft and parts; toys, games, and sports equipment Exports - partners: Germany 13.3%, France 10.2%, Hong Kong 7.4%, Singapore 7.3%, UK 6.4%, US 5.8%, Italy 5.6%, Japan 4.7% 79

80 Figure 110: Exports partners in Malta Imports USD billion (2015 est.) Imports - commodities: mineral fuels, oils and products; electrical machinery; aircraft/spacecraft and parts thereof; machinery and mechanical appliances; plastic and other semi-manufactured goods; vehicles and parts Imports - partners: Italy 23%, Netherlands 8.4%, UK 7.5%, Germany 6.8%, Canada 6.1%, China 4.1%, France 4% Figure 111: Imports partners in Malta 80

81 Figure 112: Development of Malta exports and imports with China Figure 113: Imports of Malta in products with China 81

82 Figure 114: Exports of Malta in products with China 82

83 Netherlands Economy and Demographic The Netherlands, the sixth-largest economy in the European Union, plays an important role as a European transportation hub, with a persistently high trade surplus, stable industrial relations, and moderate unemployment. Industry focuses on food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs only 2% of the labor force but provides large surpluses for food-processing and underpins the country s status as the world s second largest agricultural exporter. The Netherlands is part of the euro zone, and as such, its monetary policy is controlled by the European Central Bank. The Dutch financial sector is highly concentrated, with four commercial banks possessing over 90% of banking assets. The sector suffered as a result of the global financial crisis and required billions of dollars of government support, but the European Banking Authority completed stringent reviews in 2014 and deemed Dutch banks to be well-capitalized. Figure 115: Map of Netherlands in Europe Population 17,016,967 (July 2016 est.) Capital city Amsterdam Currency euro (EUR) Unemployment 6.2% GDP Per Capita 50,800 USD 83

84 Exports USD billion (2016 est.) Exports - commodities: machinery and equipment, chemicals, fuels; foodstuffs Exports - partners: Germany 24.5%, Belgium 11.1%, UK 9.3%, France 8.4%, Italy 4.2% Figure 116: Exports partners in Netherlands Imports USD billion Imports - commodities: machinery and transport equipment, chemicals, fuels, foodstuffs, clothing Imports - partners: Germany 14.7%, China 14.5%, Belgium 8.2%, US 8.1%, UK 5.1% Figure 117: Imports partners in Netherlands 84

85 Figure 118: Development of Netherlands exports and imports with China Figure 119: Imports of Netherlands in products with China 85

86 Figure 120: Exports of Netherlands in products with China 86

87 Poland Economy and Demographic Poland has pursued a policy of economic liberalization since 1990 and Poland's economy was the only EU country to avoid a recession through the economic downturn. Although EU membership and access to EU structural funds have provided a major boost to the economy since 2004, GDP per capita remains significantly below the EU average and the unemployment rate is now below the EU average. The government of Prime Minister Donald TUSK steered the Polish economy through the economic downturn by skillfully managing public finances and adopting controversial pension and tax reforms to further shore up public finances. While the Polish economy has performed well over the past five years, growth slowed in 2013 and picked back up in Poland s new center-right Law and Justice government plans to introduce expansionary economic policies to spur long-term growth, but social spending programs are expected to lead to increased deficit spending over the medium term. Figure 121: Map of Poland in Europe Population Capital city Currency 38,523,261 (July 2016 est.) Warsaw polish zloty (PLN) 87

88 Unemployment 9.6% GDP Per Capita 27,700 USD Exports USD billion (2016 est.) Exports - commodities: machinery and transport equipment, intermediate manufactured goods, miscellaneous manufactured goods, food and live animals Exports - partners: Germany 27.1%, UK 6.8%, Czech Republic 6.6%, France 5.5%, Italy 4.8%, Netherlands 4.4% Figure 122: Exports partners in Europe Imports USD billion Imports - commodities: machinery and transport equipment, intermediate manufactured goods, chemicals, minerals, fuels, lubricants, and related materials Imports - partners: Germany 27.6%, China 7.5%, Russia 7.2%, Netherlands 5.9%, Italy 5.2%, France 4.1% Figure 123: Imports partners in Poland 88

89 Figure 124: Development of Poland exports and imports with China Figure 125: Imports of Poland in products with China 89

90 Figure 126: Exports of Poland in products with China 90

91 Portugal Economy and Demographic Portugal has become a diversified and increasingly service-based economy since joining the European Community - the EU's predecessor - in Over the following two decades, successive governments privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country qualified for the Economic and Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU members. The economy grew by more than the EU average for much of the 1990s, but the rate of growth slowed in The economy contracted 2.5% in 2009, before growing 1.4% in 2010, but GDP fell again from 2011 to 2013, as the government implemented spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, signed in May Austerity measures also have contributed to record unemployment and a wave of emigration not seen since the 1960s. Booming exports will contribute to growth and employment in 2014, but the need to continue to reduce privateand public-sector debt could weigh on consumption and investment. Figure 127: Map of Portugal In Europe Population 10,833,816 (July 2016 est.) Capital city Lisbon Currency euro (EUR) Unemployment 11.3% GDP Per Capita 28,500 USD 91

92 Exports 52.2 USD billion (2016 est.) Exports - commodities: agricultural products, foodstuffs, wine, oil products, chemical products, plastics and rubber, hides, leather, wood and cork, wood pulp and paper, textile materials, clothing, footwear, machinery and tools, base metals Exports - partners: Spain 25%, France 12.1%, Germany 11.8%, UK 6.7%, US 5.2%, Angola 4.2%, Netherlands 4% Figure 128: Exports partners in Portugal Imports 61.7 USD billion (2016 est.) Imports - commodities: agricultural products, chemical products, vehicles and other transport material, optical and precision instruments, computer accessories and parts, semiconductors and related devices, oil products, base metals, food products, textile materials Imports - partners: Spain 32.9%, Germany 12.9%, France 7.4%, Italy 5.4%, Netherlands 5.1% Figure 129: Imports partners in Portugal 92

93 Figure 130: Development of Portugal exports and imports with China Figure 131: Imports of Portugal in products with China 93

94 Figure 132: Exports of Portugal in products with China 94

95 Romania Economy and Demographic Economy - overview: Romania, which joined the EU on 1 January 2007, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment. Economic growth rebounded in , driven by strong industrial exports and excellent agricultural harvests, and the fiscal deficit was reduced substantially. Industry outperformed other sectors of the economy in Exports remained an engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. Domestic demand was a second driver, due to the mid cut, from 24% to 9%, of the VAT levied upon foodstuffs. In 2015, the government of Romania succeeded in meeting its annual target for the budget deficit, the external deficit remained low, even if it rose due to increasing imports. For the first time since 1989, inflation turned into deflation, allowing for a gradual loosening of monetary policy throughout the period. Figure 133: Map of Romania in Europe Population 21,599,736 (July 2016 est.) Capital city Bucharest Currency Romanian Leu (RON) Unemployment 6.7% GDP Per Capita 22,300 USD 95

96 Exports USD billion (2016 est.) Exports - commodities: machinery and equipment, other manufactured goods, agricultural products and foodstuffs, metals and metal products, chemicals, minerals and fuels, raw materials Exports - partners: Germany 19.8%, Italy 12.5%, France 6.8%, Hungary 5.4%, UK 4.4% Figure 134: Exports partners in Romania Imports USD billion (2016 est.) Imports - commodities: machinery and equipment, other manufactured goods, chemicals, agricultural products and foodstuffs, fuels and minerals, metals and metal products, raw materials Imports - partners: Germany 19.8%, Italy 10.9%, Hungary 8%, France 5.6%, Poland 4.9%, China 4.6%, Netherlands 4% Figure 135: Imports partners in Romania 96

97 Figure 136: Development of Romania exports and imports with China Figure 137: Imports of Romania in products with China 97

98 Figure 138: Exports of Romania in products with China 98

99 Slovakia Economy and Demographic Economy - overview: Slovakia has made significant economic reforms since its separation from the Czech Republic in With a population of 5.4 million, the Slovak Republic has a small, open economy, with exports, at about 93% of GDP, serving as the main driver of GDP growth. Slovakia joined the EU in 2004 and the euro zone in The country s banking sector is sound. Slovakia has led the region garnering FDI, because of its relatively low-cost, highly-skilled labor force, reasonable tax rates, and favorable geographic location in the heart of Central Europe. However, recent increases in corporate taxes, as well as changes to the Labor Code, slow dispute resolution, and ongoing corruption potentially threaten the attractiveness of the Slovak market. Moreover, the energy sector is characterized by high costs, unpredictable regulatory oversight, and growing government interference. Figure 139: Map of Slovakia in Europe Population 5,445,802 (July 2016 est.) Capital city Bratislava Currency euro (EUR) Unemployment 9.8% GDP Per Capita 31,200 USD 99

100 Exports USD billion (2016 est.) Exports - commodities: vehicles and related parts, machinery and electrical equipment, nuclear reactors and furnaces, iron and steel, mineral oils and fuels Exports - partners: Germany 22.7%, Czech Republic 12.5%, Poland 8.5%, Austria 5.7%, Hungary 5.7%, France 5.6%, UK 5.5%, Italy 4.5% Figure 140: Exports partners in Slovakia Imports USD billion (2016 est.) Imports - commodities: machinery and electrical equipment, vehicles and related parts, nuclear reactors and furnaces, fuel and mineral oils Imports - partners: Germany 19.4%, Czech Republic 17.4%, Austria 9.1%, Hungary 6.3%, Poland 6.3%, South Korea 5.5%, Russia 5.2%, China 4.1% 100

101 Figure 141: Imports partners in Slovakia Figure 142: Development of Slovakia exports and imports with China Figure 143: Imports of Slovakia in products with China 101

102 Figure 144: Exports of Slovakia in products with China 102

103 Slovenia Economy and Demographic With excellent infrastructure, a well-educated work force, and a strategic location between the Balkans and Western Europe, Slovenia has one of the highest per capita GDPs in Central Europe, despite having suffered a protracted recession in in the wake of the global financial crisis. Slovenia became the first 2004 EU entrant to adopt the euro (on 1 January 2007) and has experienced one of the most stable political transitions in Central and Southeastern Europe. In March 2004, Slovenia became the first transition country to graduate from borrower status to donor partner at the World Bank. In 2007, Slovenia was invited to begin the process for joining the OECD; it became a member in However, long-delayed privatizations, particularly within Slovenia s largely state-owned and increasingly indebted banking sector, have fueled investor concerns since 2012 that the country would need EU-IMF financial assistance. In 2013, the European Commission granted Slovenia permission to begin recapitalizing ailing lenders and transferring their nonperforming assets into a bad bank established to restore bank balance sheets. Export-led growth fueled by demand in larger European markets pushed GDP growth to 3.0% in 2014, while stubbornly-high unemployment fell slightly to 12%. Figure 145: Map of Slovenia in Europe Population 1,978,029 (July 2016 est.) Capital city Ljubljana Currency euro (EUR) Unemployment 11.6% GDP Per Capita 32,000 USD 103

104 Exports 27.2 USD billion (2016 est.) Exports - commodities: manufactured goods, machinery and transport equipment, chemicals, food Exports - partners: Germany 19.1%, Italy 10.6%, Austria 8%, Croatia 6.8%, Slovakia 4.7%, Hungary 4.4%, France 4.2% Figure 146: Exports partners in Slovenia Imports USD billion (2016 est.) Imports - commodities: machinery and transport equipment, manufactured goods, chemicals, fuels and lubricants, food Imports - partners: Germany 16.5%, Italy 13.6%, Austria 10.2%, China 5.5%, Croatia 5.1%, Turkey 4% Figure 147: Imports partners in Slovenia 104

105 Figure 148: Development of Slovenia exports and imports with China Figure 149: Imports of Slovenia in products with China 105

106 Figure 150: Exports of Slovenia in products with China 106

107 Spain Economy and Demographic Economy - overview: After experiencing a prolonged recession in the wake of the global financial crisis that began in 2008, in 2014 Spain marked the first full year of positive economic growth in seven years, largely due to increased private consumption. At the onset of the financial crisis, Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most of In 2013, the government successfully shored up struggling banks - exposed to the collapse of Spain's depressed real estate and construction sectors - and in January 2014 completed an EU-funded restructuring and recapitalization program. Until 2014, credit contraction in the private sector, fiscal austerity, and high unemployment weighed on domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 22% in High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Figure 151: Map of Spain in Europe Population 48,563,476 (July 2016 est.) Capital city Madrid Currency euro (EUR) Unemployment 19.7% GDP Per Capita 36,500 USD 107

108 Exports USD billion (2016 est.) Exports - commodities: machinery, motor vehicles; foodstuffs, pharmaceuticals, medicines, other consumer goods Exports - partners: France 15.7%, Germany 11%, Italy 7.4%, UK 7.4%, Portugal 7.1%, US 4.5% Figure 152: Exports partners in Spain Imports USD billion (2016 est.) Imports - commodities: machinery and equipment, fuels, chemicals, semi-finished goods, foodstuffs, consumer goods, measuring and medical control instruments Imports - partners: Germany 14.4%, France 11.7%, China 7.1%, Italy 6.5%, Netherlands 5%, UK 4.9% Figure 153: Imports partners in Spain 108

109 Figure 154: Development of Spain exports and imports with China Figure 155: Imports of Spain in products with China 109

110 Figure 156: Exports of Spain in products with China 110

111 Sweden Economy and Demographic Sweden has achieved an enviable standard of living with its combination of free-market capitalism and extensive welfare benefits. Sweden remains outside the euro zone largely out of concern that joining the European Economic and Monetary Union would diminish the country s sovereignty over its welfare system. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Economic growth slowed in 2013, as a result of continued economic weakness in Sweden s European trading partners; Sweden s economy experienced modest growth in , with real GDP growth above 2%, but continues to struggle with deflationary pressure. Figure 157: Map of Sweden in Europe Population 9,880,604 (July 2016 est.) Capital city Stockholm Currency Swedish Krona (SEK) Unemployment 6.9% GDP Per Capita 49,700 USD 111

112 Exports USD billion (2016 est.) Exports - commodities: machinery, motor vehicles, paper products, pulp and wood, iron and steel products, chemicals Exports - partners: Norway 10.3%, Germany 10.3%, US 7.7%, UK 7.2%, Denmark 6.8%, Finland 6.7%, Netherlands 5.2%, Belgium 4.4%, France 4.2% Figure 158: Exports partners in Sweden Imports USD billion (2016 est.) Imports - commodities: machinery, petroleum and petroleum products, chemicals, motor vehicles, iron and steel; foodstuffs, clothing Imports - partners: Germany 17.9%, Netherlands 8.1%, Norway 7.8%, Denmark 7.7%, China 6%, UK 5.5%, Finland 4.6%, France 4.3%, Belgium 4.3% 112

113 Figure 159: Imports partners in Sweden Figure 160: Development of Sweden exports and imports with China Figure 161: Imports of Sweden in products with China 113

114 Figure 162: Exports of Sweden in products with China 114

115 United Kingdom Economy and Demographic The UK, a leading trading power and financial center, is the third largest economy in Europe after Germany and France. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labor force. The UK has large coal, natural gas, and oil resources, but its oil and natural gas reserves are declining; the UK has been a net importer of energy since Services, particularly banking, insurance, and business services, are key drivers of British GDP growth. Manufacturing, meanwhile, has declined in importance but still accounts for about 10% of economic output. In 2008, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector. Falling home prices, high consumer debt, and the global economic slowdown compounded Britain's economic problems, pushing the economy into recession in the latter half of 2008 and prompting the then BROWN (Labour) government to implement a number of measures to stimulate the economy and stabilize the financial markets. Figure 163: Map of United Kingdom in Europe Population 64,430,428 (July 2016 est.) Capital city London Currency British Pound (GBP) Unemployment 5.1% GDP Per Capita 42,500 USD 115

116 Exports USD billion (2016 est.) Exports - commodities: manufactured goods, fuels, chemicals; food, beverages, tobacco Exports - partners: US 14.6%, Germany 10.1%, Switzerland 7%, China 6%, France 5.9%, Netherlands 5.8%, Ireland 5.5% Figure 164: Exports partners in United Kingdom Imports USD billion (2016 est.) Imports - commodities: manufactured goods, machinery, fuels; foodstuffs Imports - partners: Germany 14.8%, China 9.8%, US 9.2%, Netherlands 7.5%, France 5.8%, Belgium 5% Figure 165: Imports partners in United Kingdom 116

117 Figure 166: Development of United Kingdom exports and imports with China Figure 167: Imports of United Kingdom in products with China 117

118 Figure 168: Exports of United Kingdom in products with China 118

119 Conclusions & Recommendations In all the countries mentioned above, the graphs of the exports to China as well as imports to China have increasing character except for Croatia, Cyprus, and Luxembourg. As for the export, China belongs to the main partner of only four mentioned countries, namely Denmark, Germany, Finland, and the United Kingdom. On the other hand, China belongs to the main importing partners for most of the countries, except for Portugal, Lithuania, Latvia, Croatia, and Bulgaria. The situation on the Czech market is the same as in most of the countries. Based on that, we suggest following recommendations: Further support the export plans of Czech companies by organizing seminars on product demand in China, problematic issues regarding the specifics of the Chinese market; Chinese market still represents unused potential for Czech exporters. SMEs are interested in using the help of state agencies by joining the trade missions to enlarge their Chinese purchasers. Such trade missions are often so expensive, that they become unreachable for SMEs. In regard with the importance of personal contact with the Chinese client, the state agencies could support SMEs by mediating contacts by less financially demanding tasks. Such possibilities include participation at the trade missions only for chosen mission phases; subsidies for SMEs for the trade missions paid regarding to the schedule of instalments or mediating contacts via electronic media services. The governmental agencies could further actively support the development of the Europe Enterprise Network regarding such activities. Actively support change from the passive trade balance to the active trade balance; Encourage creation of export consortiums of Czech SMEs. 119

120 Chinese investments in the EU Investment flows show great untapped potential, especially considering the size of the two respective economies. China accounts for just 2-3% of overall European investments abroad, whereas Chinese investments in Europe are rising, but from an even lower base. The comprehensive EU-China Investment Agreement aims to tap into this potential to the benefit of both sides. Agreement to launch negotiations for an investment agreement was reached at the EU-China Summit of February In October 2013, the EU's Member States gave the European Commission a negotiating mandate and on 21 November 2013 the launch of negotiations was announced at the 16th EU-China Summit. The first round of negotiations about an EU-China investment agreement took place in Beijing on January In 2016, EU and China continue intensive talks on details of the bilateral agreement. A comprehensive EU-China investment agreement will benefit both the EU and China by ensuring that markets are open to investment in both directions. It will also provide a simpler, secure and predictable legal framework to investors in the long term. The EU sees an investment agreement with China as an important element in closer trade and investment ties between our economies. One of the EU's priorities in the negotiations will be to remove barriers to EU investors on the Chinese market. The current level of bilateral investment between the EU and China is way below what could be expected from two of the most important economic blocks on the planet. Whereas goods and services traded between the EU and China are worth well over 1 billion every day, just 2.1% of overall EU Foreign Direct Investment (FDI) is in China. The main purpose for these negotiations is the progressive abolition of restrictions on trade and foreign direct investment and to improve access to the Chinese market for EU investors, said John Clancy, EU Trade Spokesman. On the other hand, Chinese directly invests about 8% of overall FDI to Europe, and the amount of the investments is still growing. About is a project which connects sixteen Central and Eastern European Countries (CEEC) and China. The cooperation started in 2012 when China initiated an interest to expand the cooperation with five Balkan Countries and eleven EU States which are: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia. The format focuses on cooperation in fields of investments, science, education, culture, transport, and finance. The People s Republic of China outlined the 3 priorities of potential economic collaboration: infrastructure, high technologies, and green technologies. The first meeting was in 2012 in Warsaw, where the leaders of China and CEEC met to discuss the partnership between China and CEEC. The Prime Minister of China has initiated the cooperation in Warsaw and entitled the framework document China's Twelve Measures for Promoting Friendly CEEC. Since then, several events of China-CEEC cooperation were organized as well as summits were held 120

121 every year. In 2013 there were China-CEEC summit in Bucharest, Romania, in 2014 in Belgrade, Serbia and in 2015 in Suzhou, China. The very last summit was held this year in Riga, Latvia. The 5 th meeting of Heads of Government of CEEC and China provided the opportunity to evaluate the progress of since its start in The Leaders of has confirmed the support for the China-CEEC cooperation as well as the Adriatic-Baltic-Black Sea Seaport Cooperation (the ports at the Adriatic, Baltic and Black Sea and along the inland waterways). The summit in Riga concluded in the document The Riga Guidelines for Cooperation between China and Central and Eastern European Countries which summarized the meeting and the future of The Participants of the summit supported Hungary in hosting the 6 th China-CEEC Summit in

122 Chinese companies in Europe Geographical distribution The largest numbers of the Chinese companies are concentrated in the large belt of countries crossing the middle of the Europe, ranging from the Netherlands, Germany, to the Central Europe, to the Eastern part of Balkan. Majority of them are situated in the CEE countries. Figure 169: Geographical distribution of Chinese firms in Europe (numbers) 2013 However, if we look closely at the character of these companies in regards to the new jobs created, the largest companies are situated in the Western European countries, Sweden, Russia, and in much smaller scale in Romania. The Chinese owned firms in CEE countries do not generate many new jobs. One reason for that is the fact that a lot of these companies are small restaurants that offer only couple of individual jobs, or simply rather small or medium-sized companies. 122

123 Figure 170: Geographical distribution (employment) 2013 As for the assets, they are almost exclusively concentrated in the Western and Northern part of Europe, with a smaller overlap to Portugal and Spain. Figure 171: Geographical distribution (assets)

124 If we look closely on the Chinese companies in Europe regarding their character, noticeable differences in their geographical structure can be found. As for the less knowledge intensive service companies (that is services and business operations non-reliant on professional knowledge), these are concentrated mostly in Romania, Bulgaria, Serbia, Hungary, Czech Republic, and more scattered in Germany. On the other hand, Chinese knowledge intensive service companies (offering such services as engineering and computer services, legal, accountancy, management consultancy or marketing services) are situated mainly in Germany, Netherlands, and the United Kingdom. They are represented in CEE countries as well, but in visibly smaller scale. Figure 172: Chinese less knowledge intensive service companies (numbers) 2013 Figure 173: Chinese knowledge intensive service companies (numbers)

125 As for the manufacturing companies, the distribution is less differentiated than above. The highest concentration of the Chinese low tech manufacturing companies is in the Eastern Balkan, and Western part of Germany. Smaller numbers of manufacturing companies are scattered around the Europe. Figure 174: Chinese low tech manufacturing companies (numbers) 2013 Chinese high tech manufacturing companies are again concentrated in Germany, United Kingdom, Netherlands, and in smaller scales in Russia and Romania. A limited number of such companies can be found in Poland, Czech Republic, Italy, France, and Serbia. Figure 175: Chinese high tech manufacturing companies (numbers)