China overtakes Germany as top world exporter

Saturday, January 09, 2010
FRANKFURT: China and its population of 1.3 billion has overtaken Germany, population 82 million, as the world’s top exporter, trade figures from the German national statistics office showed on Friday.

From January to November, Chinese exports were worth 1.07 trillion dollars, while German data showed that exports from Europe’s biggest economy amounted to 734.6 billion euros, or 1.05 trillion dollars.

The widely-expected crowning of a new export champion should be confirmed when Germany releases full-year 2009 trade figures on February 9.

Economic growth in both countries depend on exports, which critics claim contributes to overall global imbalances, urging Germans to consume more and Chinese authorities to let the yuan float freely against the dollar.

In November, the German trade surplus climbed to 17.2 billion euros, seasonally corrected figures showed, from 13.6 billion in October largely thanks to strong Asian demand.

German imports fell by 5.9 per ent to 53.4 billion euros, in part owing to fewer purchases of foreign autos as a car-scrapping premium expired, while exports gained 1.6 per cent to 70.6 billion euros.

“The German product specialisation with a high share of capital goods and high presence in Asian markets, make Germany one of the main beneficiaries of an investment-led global recovery,” ING senior economist Carsten Brzeski said.

He noted that German exports to China had increased by almost 12 per cent from November 2008, and that Germany’s unadjusted trade surplus of 17.4 billion euros was the biggest since June 2008.

Global trade was crushed later that year after the collapse of US investment bank Lehman Brothers.

China, meanwhile, expects its share of global trade to exceed nine per cent in 2009, Vice Commerce Minister Zhong Shan said late last month, from 8.86 per cent in 2008 despite a forecast fall in exports of 16 per cent on the year.

Chinese wares shipped abroad include items such as electronic goods and clothing while Germany exports automobiles, chemical products and specialised machine tools.

On December 30, China and southeast Asian nations established the world’s biggest free trade area in terms of population, and one which rivals the European Union and North America Free Trade Area in terms of value.

Germany benefits greatly from EU trade, which accounted for 63 per cent of its exports in November, providing 462 billion euros in revenues.

“It is good to know that the German economy can at least rely on a good old friend: its strong export sector,” Brzeski said.

Europe’s biggest economy is recovering from its worst recession since World War II, and is estimated to have contracted by around 5.0 per cent in 2009.

The German central bank forecasts growth of 1.6 per cent in 2010.

China’s economy likely grew by 8.5 per cent in 2009, a senior official has said, and could gain another 9.5 per cent this year.

In the end, most experts say increased trade benefits everyone, but efforts to boost global commerce remain deadlocked and the recent economic slowdown has fuelled fears of increased protectionism.

The Doha round of trade liberalisation talks has dragged on since its launch in 2001, dogged by a string of missed deadlines and setbacks.

For Germany, “export demand is set to show more moderate growth rates than at the beginning of the current recovery, not least as fiscal stimulus is increasingly phasing out and the global inventory cycle loses steam,” UniCredit economist Alexander Koch said.