Trade deficit with China, India to grow
Trade with China and India has developed a huge deficit for Greece, with the signs indicating that the gap between imports and exports will widen even further in coming years, a report by the Exports Survey and Study Center of the Panhellenic Exporters Association has found. The latest data, from 2003, show that Greek exports to China amounted to $60 million, while imports from there rose to $1,213 million. In the same year, India imported $53 million worth of Greek goods but Indian exports to Greece came to $210 million. Over the period covered by the report (1990-2003), Greece’s trade with the two rising Asian economies expanded considerably, but the trend is neither balanced nor uniform. Greek imports have been rising steadily to high levels, but exports show an unstable and more limited rise. The world’s two most populous nations are expanding their foreign trade dynamically, reflecting the growth of these markets but also illustrating the inability of Greek exports to capitalize so far on the opening of these market. The report refers to an «out-of-scale relationship»; the trade deficit with China is greater than with any other country in the world, with imports at more than 20 times the value of exports. Greece’s exports are restricted to very few kinds of products, mainly raw materials, cotton, marble and chemical fertilizers. Interestingly, India absorbs some 85 percent of all Greek asbestos exports. Imports, on the other hand, are spread among a great variety of products, predominantly industrial ones. The report points to the rise of labor costs in Greece along with the advent of the euro, as opposed to cheap labor in China and India, to explain why products from the two Asian countries can increase their competitiveness compared with Greek ones, as their economies do not supplement but compete with Greece. It concludes by suggesting that this out-of-scale relationship must be dealt with by boosting business alliances, as intensifying competition and changes in the business environment do not allow even a large company to proceed alone.
