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The German economy is essentially a processing economy This was true of West Germany and East Germany before unification It will remain true in the future, although the detailed GDP shares remain to be determined by unification and can not be clear until the mid or late 1990s.
Before unification, 40 percent of the German workforce was involved in the making, with major industries being machine tools, automobile manufacturing, electrical, iron, steel products chemical and optical While the industrial sector in the former East Germany is still developing, manufacturing in this part of Germany should be concentrated in the same industries over time and the future economy Germany will maintain a strong industrial component that will likely total well over 30 percent of German GDP.
Almost all regions of West Germany have an industry The main industrial areas are the Ruhr area in North Rhine-Westphalia, the traditional center of the German coal industry, steel, and heavy; the concentration of industry around several large cities such as Munich Hanover Frankfurt am Main and Stuttgart; the chemical production areas that stretch mainly along the Rhine in northern Baden-Wьrttemberg and further; and automotive manufacturing centers, more and more concentrated in southern Germany in Bavaria and Baden-Wьrttemberg.
In East Germany, the main industrial production areas in Saxony, Saxony-Anhalt and Thuringia, mainly concentrated in the Dresden Leipzig Halle and Chemnitz regions before World War II, Saxony was the technological center of Central Europe the Elbe, like the Rhine, attracted chemical and other industries along its banks is uncertain that German industries is survive, but companies in the southern part of the region seem to have a better chance than those Even further north before unification, the more the industry was concentrated in the south than in the north, the northern districts of East Germany had lower industrial employment and 25 percent, those around Berlin had industrial use between 25 and 35 percent, and those south of Berlin has over 35 percent of employment in the industry such clear geographical boundaries for the area of employment was in Germany or East.
The glory of German industry is not in large companies that are well known worldwide, such as Daimler-Benz, Volkswagen, Siemens, Bayer or see Table 16, Annex, it is in small businesses and medium enterprises which constitute what the Germans call the Mittelstand although that term also political and social management connotations, it has been widely accepted, companies that employ fewer than 500 workers These companies constitute 98 percent of all German companies , 80 rentals per cent of all employees are responsible for a significant share of exports, and provide one of the most solid foundations of the middle class.
The government has supported and promoted the Mittelstand partly for political reasons, but also because it makes a vital contribution to the economy The government has set up special provisions that allow companies to cooperate if they do not interfere and This competition makes special funds to promote research and development by Mittelstand companies After unification, the government has used investment incentives and taxation to encourage companies to invest Mittelstand in eastern Germany.
The most successful German industry is mechanical engineering with a turnover in 1991 of DM240 billion Unlike many industries in Germany and elsewhere, it is dominated by small rather than large companies, it includes more than 4000 enterprises throughout Germany only 3 percent of the companies have more than 1,000 employees German mechanical engineering has a range of over 17,000 products are exported almost two-thirds of the products.
Best known in the industry and the second, with a turnover of DM217 billion in 1991, is automobile manufacturing companies such as Daimler-Benz, Volkswagen and BMW Bayerische Motorenwerke are known worldwide Nearly half of all German car produced are exported, mainly to other EU and North America.
Electrical engineering ranks third in importance among German industries, with a turnover of DM207 billion in 1991, the largest single company Siemens, though Bosch is one of the largest German companies range of products giant electric generating turbines exported all over the world smaller electric motors and some consumer goods.
The chemical industry, with a total production of DM166 billion in 1991, based mainly on three large companies that have been leaders in the area for 100 years - Hoechst, Bayer and BASF There are also many midsize companies about the half of the industry's products are exported.
Other important industries are the traditional German industries of steel and coal mining, both heavily subsidized and yet great precision engineering employers remains a strong area Aerospace is a small growth of the industry, also heavily subsidized, and German companies often join with EU companies in other countries --such as Airbus and the production of military aircraft see Figure 10.
One reason to believe that the eastern and western parts of the united Germany will be united again into one large manufacturing economy is that such an economy was part of the German tradition for centuries and the two Germanies specialize in the same general industries Some analysts argue that the eastern economy will even be a competitive advantage later in the 1990s because of the huge sums invested in the modernization of its production facilities.
Like most modern states, Germany relies mainly on fossil fuels as energy sources about 40 percent of German energy consumption comes from oil, mostly for trucks and about 30 percent from cars domestic coal deposits, half of lignite or brown coal, is in the other half of anthracite located in the western natural gas provides about 17 percent of the energy and nuclear about 10 percent of other energy sources, such as hydroelectric power stations, solar and wind, are relatively insignificant production is in private hands.
Electrical energy is also almost three sources more than 31 percent is generated by lignite, the second largest 28 percent of nuclear reactors, and the third 26 percent of anthracite natural gas provides about 7 percent These proportions are likely to change over time due to the high levels of pollution generated by the relatively inefficient lignite, especially in the new Lдnder where it represents more than 90 percent of electricity generation see table 17, Annex I 'public aversion to nuclear power that developed in Germany in the 1980s will also be the origin of this source of power to become less natural gas will become more important.
The necessary reduction of lignite is unfortunate for the nation's economy, because she and anthracite are Germany as important natural resources In 1993, Germany was the largest brown coal producer, mining nearly twice more than the next largest producer, mining Russia Anthracite is also important, and Germany was ninth largest producer of this substance in 1993.
Germany has over twenty nuclear reactors, most of them young and with production levels below 2,000 megawatts per reactor, it has virtually no domestic uranium deposits and must import uranium enriched for its reactors most of the reactors in operation in the early 1990s were built in the 1970s and early 1980 Reliance on nuclear energy has become controversial, however, because of the controversy, no new nuclear reactor came in service since 1988 a number of the oldest reactors from the 1960s have closed a major crisis of the international energy would be required for a new impetus to nuclear energy program in Germany because the country is densely populated, and most of its inhabitants do not want a reactor near their homes or offices.
Germany has to import almost all the oil and gas it used in 1993, the three largest suppliers of crude oil were Norway April 18 percent of the total, the Commonwealth of Independent States CIS - see Glossary April 17 percent and Britain 12 4 percent see table 18, annex Germany has its own modest oil deposits, estimated in 1990 to 50 million tonnes in the North German plain has a share of reserves gas in the North sea and production, with reserves estimated in 1990-9 9 billion cubic meters, but these are not sufficient long-term sources Thus, Germany will increase its imports of oil and gas, most likely Russia east Germany relied heavily on Soviet gas before unification and unified Germany will want to buy petrochemicals from Russia to allow Russia to pay for the factory Allema nd that Russia buys.
Like all modern economies, Germany has become increasingly cost conscious and conscious conservation energy consumption While GDP in Western Germany increased by about 50 percent in 1973 early 1990, energy consumption increased by only 7 percent.
German automotive industry, is German industry.