BOFIT Viikkokatsaus / BOFIT Weekly 2021/22

During the first quarter of this year, Finland imported goods from China worth over 1.3 billion euro. The value of imports was up 13 % y‑o‑y in the first quarter and up 18 % from the first quarter of 2019. Finland’s imports from China rose significantly faster in the first quarter than total imports (up 0.8 % y-o-y). China’s share of Finnish goods imports increased during the first year of the covid-19 crisis. China’s share was about 7.5 % in 2019, rising to around 9 % in 2020. That share was about 8.5 % in the first quarter of this year. In January-March, Finland imported from China phones, computers and other machinery & equipment worth about 590 million euro (44 % of total imports). Their value increased about 18 % y‑o‑y and about 30 % from the first quarter of 2019.

The value of Finland’s goods exports to China in the first quarter was 850 million euro, an increase of 21 % from a year earlier and a 5 % increase from two years earlier. The value of Finnish goods exports to China increased faster in the first quarter than goods exports in total (3.7 %). China’s share of Finnish goods exports in the first quarter was close to 6 %, a share slightly higher than last year’s average.

Finland’s top export product to China was wood pulp (27 % of total exports). The value of pulp exports in the first quarter of this year was 230 million euro, about the same amount as in the first quarter of 2019 and a 63 % increase from year ago. Altogether, pulp & paper goods accounted for nearly 35 % of Finnish exports to China. Some of the rise in the value of pulp exports reflects higher world commodity prices, which were up by 60 % on average in the first quarter compared to the first quarters of 2019 and 2020. Specialised equipment for various branches formed the second largest category of exports to China (nearly 120 million euro or 14 % of total exports). The value of specialised machinery & equipment was about double that of the first quarters of 2019 and 2020. The combined share of the machinery, equipment & vehicle category in total exports was 28 % in the first quarter.

While Finland has long run substantial deficits in its bilateral goods trade with China, it has typically run a services trade surplus. Exports of services, however, has contracted sharply during the covid-19 crisis. The value of services exports with China in the first quarter of 2021 was just under 330 million euro, a 5.5 % drop from year ago and a 20 % decline from the first quarter of 2019. The value of Finland’s total services exports in the first quarter of this year was €5.9 billion, a 17 % decline from two years earlier. Total services imports fell by nearly 15 % from two years ago to 6.7 billion euro in January-March of this year. Despite the decline, imports of services from China grew in the first quarter to about 250 million euro, which was 13.5 % more than in the same period last year and nearly 8 % more than in the first quarter of 2019.

At the end of May, Statistics Finland released experimental value-added foreign trade indicators for 2019. In that year, the value of exports from Finland to China was €5.3 billion, of which €3.4 billion was domestically generated value added. The domestic content of Finnish goods exports to China was 64 %, a couple percentage points higher than Finnish exports generally. Measured in terms of value added, China, with an almost 6 % share, was Finland’s fourth most important trading partner after Sweden, Germany and the United States. Statistics Finland noted that China’s share of domestic value added in exports overall was slightly higher than its share of gross exports of goods and services.

Finland’s goods imports from China increased sharply during the first phase of the covid-19 crisis

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Sources: Finnish Customs and BOFIT.


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