# Germany - world's largest exporter



## Strathspey (13 Apr 2009)

I had to eat humble pie this weekend. I had always assumed that the world's biggest exporter had to be China or America. Germany would certainly not have been at the top my list, but google certainly confirms this fact. 
Can we then assume that Germany is running the world's largest trade surplus. In this case how is it possible then, that China sits on the biggest pile of cash?


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## dontaskme (13 Apr 2009)

Strathspey said:


> I had to eat humble pie this weekend. I had always assumed that the world's biggest exporter had to be China or America. Germany would certainly not have been at the top my list, but google certainly confirms this fact.
> Can we then assume that Germany is running the world's largest trade surplus. In this case how is it possible then, that China sits on the biggest pile of cash?



 China is a close second and might overtake Germany soon.  As for the cash, I guess German companies might have reinvested more abroad than China e.g. Aldi and Lidl stores, German factories in Easter Europe etc.


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## mathepac (13 Apr 2009)

dontaskme said:


> ... German factories in Easter Europe etc.


... Mexico, Brazil, The Phillipines, and on, and on ...


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## Purple (13 Apr 2009)

Strathspey said:


> In this case how is it possible then, that China sits on the biggest pile of cash?



All the money is in China and the Middle East.

Germany being the biggest exporter has figured large on my radar for the last few years so this is not news to me. The engine of the German economy is its SME sector (up to 500 employees). Most of them service the B2B (business to business) market. That means the special extractors for the mine in Bolivia, the chemical used in the production of a particular plastic, the HMI for a specific type of power plant etc etc. In other works high value added, niche manufacturing where the value-add is vastly in excess of the unit price... exactly the sort of thing we should have been doing for the last 15 years instead of building bloody houses.  
Another interesting thing about German businesses is that by the third generation their family owned businesses are most likely in Europe of North America to be run by non family members. This makes them the most likely to last into third and fourth generation ownership. The UK is the country most likely to pass the running of family businesses to the eldest son and those businesses are the least likely in Europe or North America to last into the third generation.


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## Purple (13 Apr 2009)

mathepac said:


> ... Mexico, Brazil, The Phillipines, and on, and on ...



and Ireland.


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## UptheDeise (14 Apr 2009)

Purple said:


> All the money is in China and the Middle East.
> 
> Germany being the biggest exporter has figured large on my radar for the last few years so this is not news to me. The engine of the German economy is its SME sector (up to 500 employees). Most of them service the B2B (business to business) market. *That means the special extractors for the mine in Bolivia, the chemical used in the production of a particular plastic, the HMI for a specific type of power plant etc etc. In other works high value added, niche manufacturing where the value-add is vastly in excess of the unit price... exactly the sort of thing we should have been doing for the last 15 years instead of building bloody houses. *
> Another interesting thing about German businesses is that by the third generation their family owned businesses are most likely in Europe of North America to be run by non family members. This makes them the most likely to last into third and fourth generation ownership. The UK is the country most likely to pass the running of family businesses to the eldest son and those businesses are the least likely in Europe or North America to last into the third generation.


 

Yes, +1 x millions to that!


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## Chris (14 Apr 2009)

Purple said:


> All the money is in China and the Middle East.
> 
> Germany being the biggest exporter has figured large on my radar for the last few years so this is not news to me. The engine of the German economy is its SME sector (up to 500 employees). Most of them service the B2B (business to business) market. That means the special extractors for the mine in Bolivia, the chemical used in the production of a particular plastic, the HMI for a specific type of power plant etc etc. In other works high value added, niche manufacturing where the value-add is vastly in excess of the unit price... exactly the sort of thing we should have been doing for the last 15 years instead of building bloody houses.
> Another interesting thing about German businesses is that by the third generation their family owned businesses are most likely in Europe of North America to be run by non family members. This makes them the most likely to last into third and fourth generation ownership. The UK is the country most likely to pass the running of family businesses to the eldest son and those businesses are the least likely in Europe or North America to last into the third generation.




I agree with most of this, except the point that the engine of German economy is its SMEs. It's more like the large to extremely large companies that produce the vast majority of goods and service exports. The big problem for Germany is that a lot of goods and services register as German exports, but are not manufactured in Germany.

One example from a few years ago was China looking for help building a factory to cover some of its needs for  timber varnish. BASF, Siemens and a German engineering company, who's name I forget, were contracted to design, plan and build the factory. Almost all the jobs for this project were outside Germany, but hundreds of millions were registered as 'exports'. 

There are many examples like this, and it is for these reasons that Germany has been able to maintain a very high standard of living, while also struggling with high unemployment.


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## Purple (15 Apr 2009)

German Mittelstand companies employ around 70% of German workers and account for around 40-45% (I don't have the figures to hand) of all German exports.


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## Chris (16 Apr 2009)

Purple said:


> German Mittelstand companies employ around 70% of German workers and account for around 40-45% (I don't have the figures to hand) of all German exports.



Those figures sound about right and they point out exactly what I was saying. The remaining 30% of employed people in Germany, minus public sector workers, would be responsible for the majority of exports (50+%).


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## Purple (16 Apr 2009)

Chris said:


> I agree with most of this, except the point that the engine of German economy is its SMEs. It's more like the large to extremely large companies that produce the* vast majority of goods and service exports*.





Purple said:


> German Mittelstand companies employ around 70% of German workers *and account for around 40-45%* (I don't have the figures to hand) of all German exports.





Chris said:


> Those figures sound about right and they point out exactly what I was saying. The remaining 30% of employed people in Germany, minus public sector workers, *would be responsible for the majority of exports *(50+%).


Not quite the same thing though, is it?


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## Protocol (17 Apr 2009)

Here is an article from the FT during 2006:  (ok to reproduce???)


German industry is booming, a fact that goes against the received wisdom of a country suffering high unemployment and perceived economic sluggishness.
Germany has been the world’s largest exporter of goods since 2003 and its companies have exported just under $1000bn worth of products, almost as much as the UK, France and the Netherlands combined. Indeed, exports generate some 40% of German GDP.

Germany has benefited from globalisation because of its world-class engineering sector – much of which is made up of small-to-medium-sized enterprises (the Mittelstand) that have learnt to operate across the world. For example, the globe’s largest excavator being used to drill two huge road tunnels under the Yangtze River is being assembled in Shanghai by Herrenknecht, a Black Forest-based company that employs fewer than 1500 and has sales of $490m (384m euros). 


A recent survey showed that some 98% of Mittelstand enterprises have exposure to international markets. There are threats though. Germany’s economy is highly dependent on the continued economic growth and stability of all world markets. But the biggest threat of all lies in the "decoupling of a successful corporate Germany and the broader German economy". 

Unemployment is high in Germany at 9m. The services industry has not created new jobs as fast the old sector has shed them and the engineering companies, so successful in the world economy, are not hiring the bulk of their new employees in Germany. Heraeus, the world’s largest precious metals trader, for example, has created 779 new jobs but only 30 of these are in Germany. The challenge, therefore, for German industrialists and politicians is how to spread the benefits of globalisation in the home country to prevent a serious backlash. 

Source: German’s best-kept secret: how its exporters are beating the world
Bertrand Benoit and Richard Milne
FT, May 19 2006
Review by Morice Mendoza


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## Protocol (17 Apr 2009)

Here are some diagrams of exports:


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