BOFIT Viikkokatsaus / BOFIT Weekly Review 2023/10

The latest foreign trade figures released by Finnish Customs show that the value of Finland’s good exports to China grew by 11 % last year to 4.04 billion euros. The value of total goods exports grew by 19 %, of which China saw its share decrease slightly to under 5 %. China is Finland’s fifth most important export destination. The value of Chinese goods imports to Finland grew by 28 % last year, roughly the same pace as import growth overall (27 %). The value of goods imports was 8.47 billion euros, driving the trade deficit up to 4.43 billion euros. With the collapse of Russian trade, China has become Finland’s third largest provider of imports, accounting for roughly 9 % of total imports.

Preliminary figures released by Statistics Finland show that the value of Finland’s services exports to China fell by 13 % last year to 1.24 billion euros. The value of services imports from China grew by 6 % to 1.56 billion euros. Finland’s services trade overall grew by 20 % last year. Finland’s services trade balance with China has been negative after 2020. The contraction in services exports in recent years largely reflects China’s strict zero-covid policies that only ended late last year. During that period, Chinese tourism in Finland was essentially non-existent. In pre-pandemic 2019, Chinese tourism in Finland accounted for about 15 % of Finland’s services export to China. More detailed breakdowns of the services trade in 2022 have yet to be released.

Finland’s goods and services trade deficits with China widened last year

Sources: Finnish Customs, Statistics Finland and BOFIT.  

Looking at Finland’s goods trade with China, the value of exports of chemical substances and compounds to China last year more than quintupled from 2021, accounting for 5 % of exports to China. The value of nickel exports grew by more than six times and accounted for 2 % of the value of total exports to China. The value of pulp exports grew by 15 % y-o-y, with pulp accounting for over a quarter of Finland’s exports to China last year. The value of imports of electrical machinery and equipment grew by nearly 30 % y-o-y, and accounted for about a third of Finland’s total imports from China. The value of imports of mechanical machinery and equipment also grew, accounting for about a fifth of total imports. Finland depends on many specific Chinese imports. The dependencies of Finland and the EU on Chinese imports are discussed in our latest BOFIT Policy Brief (in Finnish, English version coming soon). The analysis extends through 2021.

Foreign trade figures are also available in the Broad Economic Category (BEC) classification system. The BEC figures reveal that over half of Finland’s exports to China consisted of processed industrial supplies. Last year, exports of consumer goods to China grew, even if they only accounted for 3 % of the value of total exports. Finland mainly imports capital goods and related parts from China (nearly half of the value of imports), as well as consumer goods and processed industrial products. The value of transport vehicle imports from China increased by over 40 % last year, and represented about a tenth of total imports from China. Finland only imported a small number of passenger cars from China. Most transport vehicle imports consisted of vehicle components or vehicles intended for industrial use. This last category includes imports of cruise ships, which were worth roughly 230 million euros in both 2021 and 2022.

The structure of Finland’s goods trade with China has changed somewhat in recent years
Sources: Finnish Customs and BOFIT.

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