Nation replaces Germany as UK trade with EU affected by Brexit
China replaced Germany to become Britain’s largest source of imports for the first time since modern records began in 1997.
The UK’s merchandise imports from China reached 16.9 billion pounds ($ 24 billion) in the first quarter of this year, according to data from the British Office for National Statistics. Its imports from Germany fell to £ 12.5 billion over the same period, believed to be due to the disruption of trade between the UK and the EU after Brexit.
Figures from the UK tax and customs administration showed that China recorded the second largest month-over-month increase in value in March and the largest year-to-year increase in value. ‘other during the same month. This represents 455 million pounds and 3.142 billion pounds respectively.
Customs data also revealed that China accounts for 13% of the total value of goods imported by the UK. This is an increase from 5.5% in March 2020.
With the pandemic and Brexit, economists say it’s hard to say if the trend will continue.
“It is difficult to draw definitive conclusions from a year in which the UK has seen not only Brexit but also the worst pandemic experience in Europe in terms of per capita deaths. So we would need to monitor trends for at least another year to find ‘normal’ patterns, ”said Gayle Allard, professor of economics at IE University in Spain.
She added: “Initially it seems that Brexit and the supply constraints linked to the pandemic have been very favorable to Chinese exports. Remember that after Brexit, EU products lost some part of their cost advantage in the UK. “
Chris Rowley, professor of commerce at the University of Oxford, said trade relations between the UK and China were strained in light of strained diplomatic relations, but that trade will continue.
“Nonetheless, there are business opportunities, going beyond more traditional ones, such as food and beverage, to industries ranging from pharmaceuticals and aerospace to green energy,” said Rowley, who is also a professor at the Graduate School of Education at Tohoku University in Japan.
Analysts believe Brexit should create more opportunities for Chinese UK-oriented exporters.
“The pound sterling has fallen since the (Brexit) vote, making EU products more expensive, and some EU inputs for products made in the UK will also be too expensive. Supply chains will be severed. for many products and will need to be redone, ”Allard says.
In a separate report, data from the Office for National Statistics showed the UK has imported more goods from China than any other country since the second quarter of 2020.
The ONS said that of the UK’s top five import partners, China is the only one from which imports increased between Q1 2018 and Q1 2021.
Merchandise imports from China accounted for 16.1% of UK merchandise imports in the first quarter of 2021, after increasing 65.6% from the first quarter of 2018, posting a larger increase than exports, according to the report . “Merchandise imports from China continued to show an upward trend throughout 2020.”
The increase in imports from China in 2020 was driven by textile fabrics for face masks and personal protective equipment. The ONS added that the growing demand for commodities produced by China, such as electronics, “probably explains the increase in imports observed in 2020”.
“The pandemic had an impact here as China came back earlier and economically stronger than other countries. So there could be some catching up with others after the pandemic. Nonetheless, the economies and markets to faster growth remains in Asia, ”Rowley said. mentionned.