BOFIT Viikkokatsaus / BOFIT Weekly 2019/10

Finnish Customs values Finland’s goods exports to China last year at 3.5 billion euros, an increase of 4 % from 2017. Exports set a nearly 6 % growth trend in the first 11 months of the year, only to stumble badly in December (down 15 % y-o-y). Nearly all of the drop was in pulp exports. Some 5.5 % of Finnish exports went to China last year, making it Finland’s fifth-most-important export market after Germany, Sweden, the US and the Netherlands. Goods imports totalled 4.6 billion euros (up 1 %). China supplied 7 % of Finnish goods imports, making it the number-four import source after Germany, Russia and Sweden.

Finnish exports to China consisted mainly of pulp, machinery & equipment, refined metals, ores and wood products. Despite China granting of an ever-increasing number of import permits to Finnish food companies, they only represented slightly more than 1 % of Finnish exports to China. Finland’s main Chinese imports were machinery & equipment, clothing, footwear, textiles and metals.

Finland’s roughly 1-billion-euro goods trade deficit with China was partly offset by a large services trade surplus. Statistics Finland reports that services exported to China in the first nine months of 2018 were worth roughly 1 billion euros, while Finland bought about 600 million euros in services from China. Most of the services earnings came in the form of IPR, telecommunications, data technology and data services royalties or payments. Chinese tourism, however, has also become a major income source for Finland. Most of the services Finns bought from China involved R&D services.

In December, the OECD published its updated value-added-based figures for output and trade. The figures show that in 2015 China was fourth-largest consumer of Finnish value added. The US was clearly the largest followed by Sweden. Germany only placed slightly ahead of China. Value-added-based figures include value added from goods and services, including value added passing through third countries.