Europe has overtaken the United States as China’s No. 1 trade partner. China’s trade with the European Union reached US$306 billion through July of this year, compared with US$243 billion in trade with the US. European companies such as Volkswagen, which will sell some 2 million cars in China this year, have scored great success in serving China’s domestic market. China, in turn, has been busy buying up European companies and seaports. A new report by the Council on Foreign Relations said China it has even begun to shift part of its estimated US$2.7 trillion foreign currency reserves out of dollars and into euros. Europe’s overall trade remains balanced. EU exports to China are soaring at an annual rate of 49%. Can Europe translate its economic leverage into political influence? Newsweek suggests this is unlikely. Europe has 27 national capitals and has no single foreign policy.
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