EU says China may become its biggest market in 2012

THE EU ambassador to China said yesterday the Asian powerhouse could become Europe's biggest export market this year, overtaking the United States, as Beijing boosts domestic demand.

His comments come after Premier Wen Jiabao said China was considering helping the crisis-hit eurozone by contributing to regional bailout funds, and that a stable Europe was crucial for Beijing.

"There are indications that in 2012, China may become Europe's biggest export market," Markus Ederer told reporters in Beijing.

"European exports are growing at a higher pace than European imports from China," he said, adding the forecast was based on current trade trends. He gave no concrete figures.

The European Union has long been the biggest market for Chinese goods, and trade between the two grows every year, reaching US$567 billion in 2011.

But while Chinese exports to the European Union grew by 14.5 per cent last year from 2010, the Asian country's imports of European goods rose at a higher rate of 25.6 per cent in 2011, according to official Chinese data.

Beijing is increasingly looking to reduce its dependency on exports and focus more on domestic demand.

But its economy which grew at a rate of 9.2 per cent last year, down from 10.4 per cent in 2010 is still export-driven and Beijing has watched with increasing concern as Europe's debt crisis deepened, impacting its growth.

Last week, Wen said solving the crisis which has seen a wave of credit-rating downgrades and brought Greece to the brink of bankruptcy — was "urgent" and urged global cooperation on the issue.

After talks with German Chancellor Angela Merkel, who was on a trip aimed at boosting her hosts' confidence in Europe, Wen said China "was investigating and evaluating ways" to become more involved in solving Europe's debt problem.

European leaders have repeatedly called on China, which has the world's largest foreign exchange reserves at around US$3.2 trillion, to invest in a bailout fund, but Beijing has so far made no firm commitment.

AFP