Germany’s future turns from the U.S. to China

Germany is bettering its European rivals in the race to harness Chinese growth as exports to the Asian nation begin to outstrip those to the U.S.

With its consumers and companies sating their appetite for power turbines, cars and electronics, China became Germany’s largest non-European customer at the end of last year, helping drive up share prices from BASF SE to Bayerische Motoren Werke AG…

“This is a turning point in Germany’s economic history,” said Andreas Rees, chief Germany economist at UniCredit Markets and Investment in Munich. “China could become the largest export market of all by 2015.”

The U.S. has been Germany’s most important trading partner beyond European borders since the end of World War II, a relationship that helped turn the country into a pillar of economic and political stability for the west. Now, with China becoming the main impulse for world growth, Germany’s exporters of machinery, consumer goods and luxury cars are increasingly turning to the east.

“The theme for this decade is that millions of people in China want to live like Europeans,” said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna, who helps oversee about $36 billion. “The ‘Made in Germany’ brand is going to be very strong in this market…”

While exports to the U.S. reclaimed the top non-European spot in January, Rees said that will likely be temporary. Sales to mainland China surged 44 percent last year, more than to any other destination. They have more than quadrupled in the last decade, tripling China’s share of Germany’s exports to 5.6 percent. By contrast, the U.S. share dropped to 6.9 percent in 2010 from 10.3 percent in 2000…

Chinese demand is soaring for exactly the goods German firms specialize in — industrial machinery, cars and consumer products. The Chinese middle class could double its 2008 size to 400 million people by 2014, Societe Generale predicts, fueling growth for European firms that make the goods they want…

We are undoubtedly seeing a shift in the centre of gravity,” said Fred Irwin, President of the American Chamber of Commerce in Frankfurt. “But with German firms opening factories both in the U.S. and in China, it’s a win-win situation for them.”

RTFA for beaucoup details. No need to revisit the silliness of American industrialists. Especially those whose only loyalty has been to the flow of dollars – not the people who produced their profits for so long.

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