National bank warns of growing commercial dependence on China
The National Bank of Belgium (NBB) warned on Thursday that the country’s growing commercial dependence on China requires vigilance. Imports from China are reaching new peaks in Europe, fuelled by overproduction in several sectors and an aggressive industrial policy.
According to the NBB, there are growing fears of excessive dependence on China as the main supplier of strategic goods. These are goods considered important for national security, health, energy and green and digital transition.
Belgium appears to be heavily dependent on China for about 50 of its 200 identified strategic imports, from vitamins and industrial chemical raw materials to steel bars, LED lamps and permanent magnets. Sectors such as textile production, electronics and base metals are also indirectly exposed to China through international supply chains.
"Belgium is less exposed to disruptions in trade with China, but vulnerabilities exist at certain points in the Belgian economy"
The composition of Belgian imports from China has changed in recent years: from textiles and toys to more sophisticated goods, such as electronics and electric vehicles, the NBB said in an analysis in its Economic Review. In Belgian exports to China, the growing share of chemical products stands out.
It warned that Belgian policymakers and companies would increasingly feel the effects of the EU’s risk reduction strategy towards China, including punitive import tariffs and export controls, tightened investment vetting procedures and reporting obligations.
Indirect exposure
"Compared to several other EU member states, Belgium is less exposed to disruptions in trade with China, but vulnerabilities exist at certain points in the Belgian economy," it said.
"It is possible that many more indirect exposures currently remain under the radar. Due to the presence of many multinationals in Belgium and in the broader context of the single market, other EU member states' trade exposures to China are also relevant for Belgium."
Freighters load and unload cargo at the Qianwan container terminal in Shandong province, China, August 2024 © PHOTO CFOTO
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