EU: Neighbourhood demand offsets China drag – BNP Paribas

BNP Paribas highlights that European Union exports to China fell sharply in 2025, while exports to nearby partners such as Türkiye, Morocco, Ukraine and the Balkans increased. The bank notes that these neighbours now absorb a larger share of EU exports than China and sees this shift as structural, supported by investment, nearshoring and EU industrial policy initiatives.

Neighbouring markets gain share in exports

"Market opportunities in China are shrinking dramatically due to the country's shift towards higher-end products and its import substitution policy. 2025 marked an unprecedented turning point in this regard: European exports to China fell by 14% in nominal terms and by 10.2% in volume, as the country's share of total EU exports (7.5%) reached its lowest level in nearly fifteen years."

"Türkiye, Morocco, Ukraine and the Balkans are capturing a growing share of European exports. A pivotal moment was reached in 2023, when the total exports to these countries exceeded those to China. This bloc now accounts for nearly 10% (9.4% in 2025) of total EU exports, excluding intra-zone trade."

"Economic ties between the EU and its neighbours are strengthening: trade in goods (total exports and imports combined) has reached 8.5% of the EU’s overall trade, excluding intra-zone trade. This shift in European trade patterns is structural and reflects the industrial transformation of these countries, which are becoming increasingly integrated in the European value chain."

"These growth drivers for European companies are set to strengthen in the coming years, with initiatives aimed at relocating some industrial activities closer to the European market (nearshoring). This trend is anticipated to develop in tandem with the expected strengthening of intra-EU trade, driven by increased investment efforts."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)