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China dethrones Germany as top goods exporter
Published on: 2010-01-06
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BRUSSELS -- China took over the mantle of the world's top merchandise exporter from Germany in 2009, according to the latest figures, aided by a global economic crisis that has taken a greater toll on other trading powers.


China exported $957 billion of goods in the first 10 months of 2009, compared with $917 billion for Germany, according to customs data compiled by Global Trade Information Services, a Geneva-based firm.
 

No changes in November or December are expected to overturn the Chinese lead, trade experts say. China is likely to publish trade figures for the full year next week.


China's claiming of the title of world's largest exporter was widely expected, with annual growth in its exports regularly exceeding 20% during the past decade.


China in 2007 overtook Germany as the world's third-largest national economy, and is on track to soon surpass Japan to become the second-largest economy after the U.S.


"China has been growing much more rapidly than Germany on all sorts of dimensions and has a population of 1.3 billion, while Germany has 83 million," said Douglas Irwin, a professor at Dartmouth College.


China's ascendancy has been accelerated by the international financial crisis, from which it has suffered less than other major economies.


With trade in tatters around the world, Chinese exports fell 20.4% during the first 10 months of 2009, compared with 27.4% for Germany and 21.4% for the U.S. The trade figures don't include transactions in services, which are significant in developed economies but a weak point for China.


Germany suffered a particularly heavy drop in 2009 exports because of its concentration in machinery and other capital goods, which were hit by a slump in investment spending by industries world-wide. Global consumer spending fell by less than corporate investment, benefiting China's exports of low-cost consumer goods relative to Germany's high-end equipment.


"Most of the products China produces for the global market are life necessities," says Huang Huiguo, chief executive of Kingsons International, a Guangzhou-based exporter of leather bags.
 

China's currency, the yuan, is tied to the sinking dollar, helping to keep the country's exports competitive on price. Those factors helped Chinese goods gain market share in the U.S., Europe and Japan last year.


High export volumes don't necessarily translate into overall economic success.


Many economists criticize both Germany and China for focusing too much on export volumes, and doing too little to promote sustained growth in domestic demand and improve living standards.


The size of China's total exports "is not speaking to how important and powerful Chinese companies are on their own," says Scott Kennedy, a China expert and political scientist at Indiana University.


Many of China's exporters earn relatively slim profits churning out goods designed and marketed by other companies.


For Germany, the rise of China has brought opportunities as well as challenges.


The country is "our biggest competitor but also our most dynamic market," says Jens Nagel, a trade expert with the German Exporters Association.


Many German companies say their exports to China and other emerging economies are buoyant again, but that sales to the U.S. and other European countries -- which are Germany's biggest market -- are recovering more slowly, if at all.


In fact, by exporting more, Chinese factories need more of the capital goods that Germany produces, said Dirk Schlotböller, economist at the German Chamber of Industry and Commerce.


"If China grows very fast and gets the championship in exports, it's only good for the German economy," Dr. Schlotböller added.


Germany's primary economic problem isn't that they country exports too little, but that its own consumers don't spend enough, which holds back its domestic service sectors, many economists say.


"Service sectors are more important for jobs that export industries, which tend to be very capital-intensive," says Elga Bartsch, an economist at Morgan Stanley in London.

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