Wednesday, July 23, 2014

German exporters pin hopes for growth on China, US

April 29. 2013 10:36AM
Associated Press

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(AP) China and the United States represent the biggest growth opportunity for German exporters, as European economies continue to falter, a group representing the industry said Monday.

The Federation of German Wholesale, Foreign Trade and Services, or BGA, said governments in Italy, France and elsewhere appear unwilling to make necessary reforms to boost growth.

"While Europe will for the time being remain by far the most important market for German products, the recession in the eurozone is accelerating the shift toward non-European markets," BGA president Anton Boerner said.

Some 43 percent of German exports went to countries outside the European Union last year, up from 37 percent a decade earlier, the group said. For 2013, the BGA predicts German exports will grow by 3 percent to reach a new record of 1.13 trillion euros. By 2025 more than half of German exports will be to countries outside the 27-nation bloc, it predicted.

China, the U.S. and Germany are the world's three largest exporting countries.

Boerner urged European leaders to press ahead with bilateral free trade agreements such as the one recently concluded with South Korea. Europe is in preliminary talks with both Japan and the U.S to forge similar deals, which could add tens of billions of euros to the global economy.

He added that the United States would stage an "economic comeback we shouldn't underestimate" in the coming year, thanks to cheap energy prices and a well-trained workforce.

While this will boost exports to the U.S., which are expected to grow by 15 percent to almost 100 billion euros ($130.8 billion) this year, German exporters will also face tougher competition from their American counterparts as a result, he said.

Meanwhile, exports to China are expected to grow by 5 percent to 70 billion euros in 2013 as the country ratchets up domestic demand, particularly for high-quality products such as German cars and machinery.

Forecasts for Europe, however, are gloomy.

Boerner said his group expects economic conditions in southern Europe to worsen further and that he has little hope for structural reforms in Italy and France in the coming years.

Associated Press

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