Finland’s trade dependence on China at EU average
The report shows that China has a particularly strong role in imports to Finland. Any disruption of imports from China would soon be reflected on commerce and industry especially as shortages of mobile phones, laptops, other electronic devices, and batteries. The imports of components and other intermediate products are centred on certain sectors, such as the electronics industry. It would not be possible to quickly pivot to alternative sources of imports especially if many countries were affected simultaneously by the disruptions.
“Research evidence reveals certain direct trade dependencies on China especially with regard to our imports. In most cases, however, trade dependence is mutually beneficial. It is almost impossible for statistics to detect indirect interdependencies in subcontracting chains. We encourage companies to continue to assess their supply chains for potential commercial disruptions. At the same time, there is a lot of untapped potential in our exports to China,” says Nina Vaskunlahti, Under-Secretary of State for International Trade at the Ministry for Foreign Affairs.
It is estimated that more than 15,000 person-years depend on imports from China. The indirect employment impact is even greater through subcontracting chains.
Large companies account for two thirds of exports to China. There is a strong focus on industry. The turnover of Finnish subsidiaries operating in China is significant, and companies have made major investments in Finland, too, because exports to China are so profitable.
So far, no significant Chinese investments have been made in the Finnish basic infrastructure or critical infrastructure. The Bank of Finland Institute for Emerging Economies (BOFIT) has estimated the direct links between Finland's financial sector and China as moderate.
In Finland and elsewhere in Europe, the pace of the green transition in society and industry has so far been tied to the availability of critical raw materials from China. This meets the criteria for strategic dependence as defined by the EU.
Five key observations
- Finland’s trade dependence on China in the sectors examined in the report is at the EU average.
- It is important to further promote Finnish and European capabilities in the production and recycling of critical raw materials in sustainable ways.
- Finnish companies are encouraged to diversify their production chains and supply chains and to increase the transparency of their value chains. The Ministry for Foreign Affairs contributes to promoting this objective by supporting the elimination of country-specific trade barriers and by promoting the EU’s trade agreement network.
- There is still significant growth potential in China in terms of exports of end products and services that yield higher added value.
- There are good grounds for further sector-specific studies on how to compensate for vulnerabilities. More information is also needed on the significance of trade dependencies for the security of supply in the Finnish society.
The Ministry for Foreign Affairs has coordinated the study in cooperation with an extensive network of partners.
- Report in the Government publication series. A Statistics Finland analysis on trade between Finland and China is annexed to the report.
- BOFIT analysis of Finland’s and the EU’s imports from China (BOFIT Policy Brief series) (In Finnish)
Teemu Laakkonen, First Secretary, Unit for Eastern Asia and Oceania (commercial and economic affairs with China), tel. +358 50 911 3579, firstname.lastname@example.org
Juuso Kaaresvirta, Senior Economist, Bank of Finland Institute for Emerging Economies (BOFIT), tel. +358 9 183 2107, email@example.com
About Ulkoministeriö / Utrikesministeriet
Laivastokatu 22, PL 176
Subscribe to releases from Ulkoministeriö / Utrikesministeriet
Subscribe to all the latest releases from Ulkoministeriö / Utrikesministeriet by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Ulkoministeriö / Utrikesministeriet
Finland to attend meeting of Nordic foreign ministers21.3.2023 14:12:31 EET | Press release
Minister for Foreign Affairs Pekka Haavisto will attend a meeting of Nordic foreign ministers (N5) on 22 March.
Finland deltar i de nordiska utrikesministrarnas möte21.3.2023 14:11:47 EET | Tiedote
Utrikesminister Pekka Haavisto deltar i de nordiska utrikesministrarnas N5-möte den 22 mars.
Suomi osallistuu Pohjoismaiden ulkoministerien kokoukseen21.3.2023 14:10:25 EET | Tiedote
Ulkoministeri Pekka Haavisto osallistuu Pohjoismaiden ulkoministerien N5-kokoukseen 22. maaliskuuta.
Finland to grant additional support to earthquake areas in Türkiye and Syria20.3.2023 17:23:42 EET | Press release
Finland will grant additional EUR 12 million in humanitarian assistance to help earthquake survivors in Türkiye and Syria. The support will be used to finance food aid, water services, emergency shelters and protection to those who lost their homes.
Finland ger ytterligare stöd till jordbävningsområdet i Turkiet och Syrien20.3.2023 17:22:17 EET | Tiedote
Finland beviljar ytterligare 12 miljoner euro i humanitärt bistånd för att hjälpa dem som överlevde jordbävningen i Turkiet och Syrien. Stödet ska användas för livsmedelshjälp, vattentjänster, krisinkvartering och skydd för dem som förlorat sina hem.
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.Visit our pressroom