IndiaToday live TV
Once a source of envy, Germany Chinese exports become a risk.
BERLIN Germany exposure to export to China, for years a source of economic strength, is fast becoming a risk that raises questions about the health of other sources of growth in Europe's largest economy.
Germany has the largest trade exhibition in China of the 28 countries of the European Union, largely thanks to demand for its cars and the strength of its industry engineering.
For years, its EU peers have tried - and failed - to match the prowess export from Germany to China, where German companies have taken advantage of the infrastructure and consumer spending that helped make the Chinese economy in the world second.
But now, a slowdown in China means that the business of German companies there flow benefits with the risks to the burden of costs Concerns about China sent global stocks falling on Monday before rebounded Tuesday when rates Beijing cut interest.
The weaknesses of Germany special relationship with China is increasingly evident, said Hans Kundnani the German Marshall Fund.
I think there is a perception growing among German business people they are too exposed to China.
Economic ties to Germany to China overshadow those of its European counterparts led by the major car manufacturers, German companies in China moved faster and more aggressively than many of their rivals, and China has been an important source of growth for German exporters.
In 2007, the Chinese market accounted for only 3 1 percent of German exports, but this figure rose to 6 from 6 percent last year, the data shows the Federal Statistical Office In contrast, the share exports to France fell slightly over the same period.
Growth in China was the fourth largest export market of Germany in 2014, after France, representing 9 0 percent of total exports, the United States 8 5 percent and Britain 7 4 percent.
However, this year, the Chinese market is fast fading for Germany in the first half of 2015, export growth to China was 0 8 percent - the same as the figures of the DIHK chambers of commerce salon in Greece overloaded crisis.
German engineers exports to China declined 4 9 percent in the first half of their products from the machine lag the greatest cars Germany sector of export goods to China.
For companies like German industrial group ThyssenKrupp, the Chinese market is important for China has 16 percent of sales of ThyssenKrupp Elevator, about 1 billion euros 1 14 billion last year.
Already some major German brands are feeling the impact of the downturn, which saw activity in the shrinkage of China's factory sector to its fastest pace in almost 6-1 two years in August as domestic demand and export decreased.
Carmaker Volkswagen last month lowered its global sales forecast and said it was reinforced to the stagnation of volumes in China, after years of double-digit growth in its largest market.
The German government has been careful to describe the impact of China's slowdown limited to Germany and Berlin is sticking to her 1 8 percent growth forecast for this year.
This throws the spotlight on more mature markets like the US and the EU, said Berlin are holding up well.
The United States actually overtaken France in the first half of this year to become the largest export market of Germany for the first time since 1961, the DIHK said, but with European economies struggle to take the economic momentum, the United States a singular market for German exporters depend.
While Chinese demand holds up - Beijing still has a target of 7 percent for 2015 Official - China is morphing from one market for German companies to a source of competition for them.
Chinese companies move the value chain and are increasingly competing with German companies, said Kundnani The long-term danger to German companies is to get pushed out of the mass market in luxury niches.
This is already affecting automobile manufacturers from Germany, which last year accounted for nearly a third of 75 billion euros from Germany's exports to China.
VW said last month the profits of its two Chinese joint ventures could even drop this year below levels in 2014 amid a shift to low-cost cars, while demand is growing driven by rural areas, poorer Chinese.
Klaus Wohlrabe, an economist at the Economic Institute of the German Ifo, said the China factor will grow in importance for companies in Germany, which stimulated economic growth eurozone in the second quarter that France has stagnated and Italy lost its momentum.
The slowdown in China is also likely to harm other German emerging export markets A senior government official said Tuesday in Brazil an economic recovery that had been planned for later this year could be delayed because of China .
This could pose a problem for German companies who have paid more than 19 billion euros in the Brazilian economy in trouble.
Exports remain crucial to the economic health of Germany.
In the period from April to June, they rose 2 2 percent from the same quarter, the biggest increase since the first quarter of 2011 and helped stimulate economic growth from 0 4 percent from the same quarter, data federal statistics Office show.
But in the uncertain global economy, Germany could try to refocus its economy on foreign trade.
Germany still has some room for maneuver and it would be good to focus more on investment and less on exports, said Sandra Heep, expert in economic policy at the Institute of China Studies Mercator in Berlin.
With the slowdown in China will become more urgent.
A breakdown of the economic performance of Germany in the second quarter showed continued weakness in gross investment of capital investments fell in the three months and razed 0 1 percentage points of economic output.
Low investment is the Achilles heel of the German economy, said Marcel Fratzscher, head of the DIW economic institute in Berlin.
The weaknesses in the transport of Germany and digital infrastructure, skilled labor shortages and uncertainty surrounding energy policy meant that companies stood out investments in Germany, he said.
German productivity already accuses France, Belgium, the Netherlands and the United States, the figures from the Organization for Economic Cooperation and Development show.
By focusing so intensely on export markets such as China, Germany, the company may further compromise the perspective of the steam engine construction of domestic growth.
Additional reporting by Rene Wagner; Edited by Jeremy Gaunt.
Once a source of envy Germany Chinese exports turn into a risk Reuters, source, envy, Germany, China.