Unless there has been some secret agreement that we do not know about, Spanish Prime Minister Pedro Sánchez’s trip to China does not seem to have produced economic gains in the asymmetrical trade relations between the two countries. The Spanish leader did, however, get his photo taken with the very powerful leader of the world’s second-largest superpower, and Xi Jinping further strengthened the perception that others have of his growing power and his consequent possibilities of becoming the alternative world leader to the United States.
The reality is that Spain, in addition to many other negative records, accumulates the largest trade deficit in its portfolio with China, precisely thanks to a growing exchange of products that is clearly asymmetrical in favour of Beijing. If in 2021 the Spanish deficit with respect to China was 26 billion euros, in 2022 it soared to 41 billion, and pending confirmation of the figures for the first quarter of 2023, the data continue to point in the same unbalanced direction for Spain.
Compared with the volumes of Europe’s big players, Germany, France, the Netherlands and Italy, even adding the post-Brexit UK, account for almost 90% of European exports to China, while Spain has to make do with barely 4%. It is often argued that Spanish companies arrived later in China than their European counterparts and had to pay the high price of China’s protectionist bureaucracy, but they all had to pass through these caudine gibbets, sharpened or tempered according to the political discrepancies at different times.
In Spanish-Chinese relations, the most delicate moment came when, based on the principle of universal jurisdiction, Spanish judges eager for glory and world fame wanted to prosecute several Chinese leaders, including former President Jiang Zemin, for the repression in Tibet. Not only did Spanish companies in China suffer the consequences of this attempt, but the Chinese embassy in Madrid threatened the then head of Spanish diplomacy, José Manuel García Margallo, with foreclosure of Spain’s large foreign debt in his hands. A new law, agreed between Mariano Rajoy and opposition leader Alfredo Pérez Rubalcaba, unravelled the mess, culminating in an official visit to Beijing by the prime minister, who then signed agreements worth more than 3 billion euros. Spain’s foreign ministry was haunted by the judgement of US Secretary of State Hillary Clinton when the United States demanded criminal sanctions similar to those sought by the Spanish courts. “It is never a good idea to attack and want to imprison your banker”, alluding to the huge debt that the American superpower was holding in the hands of China.
European weakness and Spanish indigence
For its part, the European Union also exhibits a marked weakness not only with China but also with the countries that supply it with energy products, the real Achilles heel of the European club, which could mark its own future with respect to both the United States and China.
Here too, the Eurostat figures are dramatic: the trade balance of the EU as a whole has gone from a surplus of 55.2 billion euros in 2021 to a deficit of 431.2 billion in 2022. The net energy bill (exports minus imports of energy products) has a lot to do with this, with a deficit of 285.8 billion euros in 2021, rising to a deficit of 653.6 billion euros in 2022. And rising, because the first month of 2023 alone already accumulates a deficit of 34.5 billion euros.
And finally, in terms of the impact on EU citizens, the overall impact is 0.5% less GDP. Obviously, not all countries suffer with the same intensity, especially in terms of the wealth-poverty indices within the EU itself.
It is disturbing to note that Spain is the only country in the club whose inhabitants have a lower per capita income now than in 2019: 24,590 euros, 2.3% less. Given the enormous inflation rates, it is clear that Spain is accelerating its impoverishment by leaps and bounds.