SHARE
COPY LINK

CHINA

Key German exports eclipsed by China

Germany's dominance in key export sectors outside of Europe is waning as China takes over greater market share, a new study has found. It predicts Chinese exports to Europe could even soon rival German products.

Key German exports eclipsed by China
Photo: DPA

Chinese exports to Japan and the United States have taken over from Germany’s, even in the traditionally Teutonic areas of engineering, chemicals and control systems. In these markets, Germany has retained dominance only in the automotive industry.

The findings are part of a wide-ranging study on German-Chinese trade relations, carried out by Prognos on behalf of the Bertelsmann foundation.

The study also revealed that Germany has failed to establish itself as a leading exporter in major emerging economies like Brazil and India. In both markets, China has either taken over from or is hot on the heels of Germany in all areas except for automobile manufacture.

In India, China leads the way in engineering as well as the import of chemicals. Here Germany trails the United States, Argentina and South Korea.

The study authors speculate that Germany’s focus on establishing itself in China could have come at the expense of gaining a foothold in India and Brazil. However they also cite higher product prices as a possible explanation for the lower demand there.

DPA/The Local/kkf

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS