-- The evolution of EU-China trade reflects the evolution in overall EU trade with emerging economies. While the latter, and China in particular, are making significant gains in some segments of high technology products (such as laptop computers, mobile phones and DVD players), the EU is strengthening its specialization in high-quality products in preference to low- and middle-quality goods.

-- Commission studies indicate that the expansion of the Chinese market will continue to bring important benefits to EU business operators. Although Chinese companies will become competitive in more market segments (for example in basic chemicals or some types of vehicles), other segments will expand rapidly (for example, specialty chemicals or demand for capital-intensive car components), offering new opportunities to EU operators.

-- The EU is particularly strong in exports of machinery and vehicles, which account for two thirds of all EU goods exports and one third of all Chinese imports of machinery. EU exports to China of chemicals have doubled in the last five years, making China the EU’s second largest export market. There is potential to increase EU market share in line with EU performance in other markets. As China develops, its demand for high-end branded European consumer products will increase.

-- In order to succeed, EU operators will need to develop a more thorough knowledge of the Chinese market and play on their comparative advantage. Europe’s chief assets in its trade relationship with China are innovation, specialization, quality, related services and brand identity. High unit labor costs are not necessarily an impediment to export success. The strongest performing European exporters to China have some of the highest labor costs in Europe.

Source: EU-China Trade and Investment: Competition and Partnership