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8/10/2019 Prsentation Chinas Gateway
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CHINAS GATEWAY TO EUROPE
International Trade Case Research
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Introduction
1. 2. 3. 4. 5.
China is the fastest growing economy in the world
China has become largest trading nation in the world forthe 1sttime in history
Total trade in goods: 4.16 trillion
First quarter in 2014: trade slowed down
President Xi Jinping aims for a bilateral trade agreementbetween China and the EU
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Introduction
1. 2. 3. 4. 5..
China imported USD 93.01 billion from the 28 EUMember States and exported USD 174.22 billion duringthe first half of 2013
In Germany the volume of trade with China is ahead ofall other countries of the EU
China views Germany both economically and politicallyas its gateway to Europe
To find reasonable arguments for Germanys position We will compare the 3 strongest European
Economies => Germany, UK, France
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Introduction
General Definitions
Analysis
Discussion
Conclusion
Outline
1
2
3
4
5
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General Definition
Gross Domestic Product:
InvestingAnswers, Inc (2014):
GrossDomestic Product (GDP) is the broadest
quantitative measure of a nation's total economic activity.More specifically, GDP represents the monetary value of
all goods and services produced within a nation's
geographic borders over a specified period of time.
1. 2. 3. 4. 5.
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General Definition
Export:
The Farlex Financial Dictionary defines Exports as:
A good produced in one country and sold to a customer. In
another country. Exports bring money into the producingcountry; for that reason, many economists believe that a
nation's proper balance of trade means more exports are
sold than imports bought. Exports may be difficult to sell in
some countries, as the importers may put up variousprotectionist measures such as import quotas and tariffs.
Most governments seek to promote exports, while they
have differing positions on imports.
1. 2. 3. 4. 5.
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Trade relations China - UK
1. 2. 3. 4. 5.
Established in 1950
First western power, gathering trading experience withChina
With 62%, the UK is the biggest oversea market for theChinese currency RMB
7thlargest importer worldwide ; 12thleading in exports
Large trading deficit
Over past 4 years, Chinas exports to the UK havedoubled
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Main products imported from China in 2013:electric equipment: $ 9.2 billionmachines, engines, pumps: $ 8.5 billionclothes: $ 7.3 billionfurniture, lightning and signs: $ 3.7 billion
Trade relations China - UK
1. 2. 3. 4. 5.
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Main products exported to China: $ 19.1 billionVehicle industry: $ 7.2 billionmachines, engines, pumps: $ 2.7 billionmedical / technical equipment: $ 1.2 billionelectric equipment: $ 1.0 billion
Trade relations China - UK
1. 2. 3. 4. 5.
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Trade relations to France
Established in 1964
France enterprises run businesses 10 years later thanUK and Germany
One reason why they started their business: - majorweapon deal between France and Taiwan
Helping China by developing their nuclear powerprograms
1. 2. 3. 4. 5.
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Trade relations to France
China`s exports to France: USD 26.9 billion
China`s imports from France: USD 23.1 billion
Trading deficit of almost USD 6 billion
1. 2. 3. 4. 5.
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Chinese exports to France
Main products imported from China in 2013:electric equipment: $ 5.2 billionmachines, engines, pumps: $ 4.5 billionclothing $ 4.5 billionfurniture, lightning and signs: $ 1.9 billion
1. 2. 3. 4. 5.
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French exports to China
1. 2. 3. 4. 5.
Main products exported to China in 2013:aircraft and spacecraft sector: $ 5.1 billionmachines, engines, pumps: $ 3.9 billionelectronic equipment: $ 1.9 billionalcoholic beverages: $ 1.6 billion
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Trade Relations China-Germany
In 1972, diplomatic relations China and Germany
The Sino-German diplomatic relations great success story today
German exports to China In 1972 -> USD 270 million In 2013 -> USD 87.81 billion
1. 2. 3. 4. 5.
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Trade Relations China-Germany
China is the 5thbiggest buyer of German products After France, the United States, the United Kingdom
and the Netherlands
German exports from China USD 87.81 billion in 2013
The principal German exports to China: motor vehicles and vehicle parts (29% of exports) machinery (27%)
data-processing equipmentelectrical and optical goods (9%) electrical equipment (9%) chemical products (9%)
1. 2. 3. 4. 5.
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Trade Relations China-Germany
China is the 2nd largest provider of German imports,after the Netherlands.
German imports from China USD 96.12 billion in 2013
The principal German imports from China: data-processing equipment electrical and optical
goods (36% of imports) clothing (11%)
electrical equipment (10%) machinery (8%) metal goods (4%)
1. 2. 3. 4. 5.
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Trade Relations China-Germany
China is Germanys principal trading partner in Asia Bilateral trade USD 183.39 billion in 2013
Win-Win-Situation Chinas transformation offers great opportunities for
German business Big market
Chinese companies need the high-quality machinery
and equipment from Germany to manufacture theirgoods Textiles, electrical goods and toys which are then
exported to Germany
1. 2. 3. 4. 5.
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Discussion
1. 2. 3. 4. 5.
What are possible reasons forGermanys position?
Will Germany remain Chinas
gateway to Europe?
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Discussion
Discussing imports and exports between Germany,United Kingdom France and China
1. Differentiating trade goods between the 28 European
Countries and China
2. Breaking down the trading goods and compare themto the three selected countries
1. 2. 3. 4. 5.
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Discussion
Step 1: EU28 trade in goods with China (per product, inmillion euro)
1. 2. 3. 4. 5.
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Discussion
Step 2: Chinese exports to Germany, the UK and France
1. Electronic equipment2. machines, engines and pumps
are the main trading goods
The Top-10 exported goods arenearly the same in all 3 countries
1. 2. 3. 4. 5.
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Discussion
Germany imports in the 2 sections 1.5 times > United Kingdom 3 times > France
Medical, technical equipment and organic chemicals issignificant higher in Germany Bayer, Boehringer Ingelheim or Ratiopharm,
obtaining almost 80% of their ingredients to produce
medical products from countries like China, Taiwanand India
1. 2. 3. 4. 5.
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Discussion
Vehicles is another sector, which occurs in the Top-10 listof Chinese exports to Germany
Car-Industry, with a revenue of more than USD 500
billion in 2013
By far the biggest industry in Germany BMW, Mercedes and VW are manufacturing
components of their cars in China and re-importthem again to Germany
1. 2. 3. 4. 5.
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Discussion
Chinese imports from Germany, the UK and France
1. 2. 3. 4. 5.
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Discussion
The total volume of machines, engines and pumpsexported to Germany 9 times higher than UK 6 times higher than France
Vehicles imported from Germany to China 3 times higher than UK
Possibly reasons: Rolls Royce from the UK cannot address the mass
market
1. 2. 3. 4. 5.
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Discussion
Imports of German electronic equipment 12 times as high as imports from France and the UK
Possibly reasons:
Siemens, a German producer of electronic equipmenthas a work-force of 43.000 in China
USD 3.5 billion deal with Shanghai Electric PowerGeneration
Developing steam and gas turbines Huge amount of electronic equipment of German
companies is needed
1. 2. 3. 4. 5.
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Conclusion
China is the fastest growing economy in the world
To keep on rising they need: technology
and knowledge
Europe plays a key role in this continuing progress
Germany takes on an outstanding role in thisdevelopment
1. 2. 3. 4. 5.
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Conclusion
Chinas largest economic sectors are: Machines, engines and pumps (in general:
technical equipment) Vehicles
Germany with its longstanding successful, experiencedcompanies and its top qualified engineers and managerscan satisfy Chinese demands
The label Made in Germany is well known in Europe,even worldwide
1. 2. 3. 4. 5.
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Conclusion
It turns out to be a Win-Win-Situation for both countries
In the future, companies will gain more knowledge andneed to be seen as competitors as well as partners and
customers
As long as China requests high-quality technology andknowledge, Germany will remain the gateway to Europe
UK and France cant deliver the same quality level as
Germany
1. 2. 3. 4. 5.
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Conclusion
French chances: The large Space and aircraft economy,in case Chinas market develops in this segment
UK chance is the growing welfare in China, which
triggers a higher demand for luxury cars (Bentley, RollsRoyce..)
1. 2. 3. 4. 5.
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End
Thank you for listening!
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Sources
Andrea Fiano (2014): GDP, URL:https://www.gfmag.com/global-data/glossary/gdp-gni definitions, 01-
10-2014
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INTA_SP(2014)522342_EN.pdf. 02-10-2014
Farlex Financial Dictionary Export (2012):Export, URL: http://financial-
dictionary.thefreedictionary.com/Export, 01-10-2014
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dictionary.thefreedictionary.com/Import+(international+trade), 01.10.2014
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http://www.tradingeconomics.com/france/imports-from-china-hong-kong, 01-10-2014
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