Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The graphs don't mean that much because they don't differentiate between goods and services. As I understand it, Germany's world leadership in exports (it exports more than either Japan, China or the US) is due to wage moderation, which on the other hand (coupled to the demographic trend) restricts domestic demand and makes its people less happy.

(The comparison is slightly unfair because the exports include intra-EU trade. It might be interesting to compare Germany and California including CA's intra-US balance)

Whether a strong euro will dent this depends on what the euro is strong against. If the Chinese keep the policy of steady appreciation of their currency, then obviously a strong euro (vis a vis the dollar) will not make the difference. Wage levels in China will also be rising, so the difference will have to come from greater improvements in Chinese productivity, branding, product innovation and quality control. I don't know if Germany's edge there will be caught up with so soon.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 23rd, 2007 at 05:44:30 AM EST

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