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“Bilateral trade between China and the European Union: Emerging challenges and opportunities in a shifting global landscape”

Author

Listed:
  • Oscar Claveria

    (AQR-IREA, University of Barcelona)

  • Mihály Tamas Borsi

    (Universitat Ramon Llull)

Abstract

This paper examines trade relations between China and the European Union from 2000 to 2022, focusing on the role of trade policy uncertainty alongside key economic and institutional factors. Using an extended gravity model, the results show that China’s economic growth is a dominant driver of trade flows. The study introduces a novel proxy for China’s trade policy uncertainty, finding that it significantly influences bilateral trade. Results are robust to different specifications. Additionally, the results indicate that while non-eurozone EU countries demonstrate higher trade flows with China, the immediate impact of China’s Belt and Road Initiative on EU trade remains limited. Given the anticipatory nature of trade policy uncertainty and its relationship with economic growth, the findings highlight the usefulness of trade uncertainty indicators as tools for the early detection of shifts in trade patterns, offering valuable insights for policymakers to design strategies that promote greater stability and economic integration

Suggested Citation

  • Oscar Claveria & Mihály Tamas Borsi, 2025. "“Bilateral trade between China and the European Union: Emerging challenges and opportunities in a shifting global landscape”," AQR Working Papers 202506, University of Barcelona, Regional Quantitative Analysis Group, revised Oct 2025.
    • Handle: RePEc:aqr:wpaper:202506
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    File URL: https://www.ub.edu/irea/working_papers/2025/202512.pdf
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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