Corona recession: Ifo: China overtakes Germany – world’s largest current account surplus | message

According to calculations by the Munich researchers, the People’s Republic has a surplus of the equivalent of 310 billion dollars, as the study published on Friday by Reuters shows. Germany follows in second place with $ 261 billion. In both countries, these enormous sums come about mainly because they sold far more goods abroad than they received from there. Another export nation follows with a clear gap in third place with Japan.  The  country has a surplus of $ 158 billion.

 The  change at the top is mainly due to the fact that Germany, unlike China, sold significantly fewer goods abroad due to the recession with important trading partners. “

 The  traditionally high surplus in the German trade in goods turned out to be 34 billion dollars less than in 2019,” said study author Christian Grimme to Reuters. China, on the other hand, was able to increase its exports last year despite the global corona recession.

 The  reason:

 The  export world champion produces goods that are particularly in demand during the pandemic. “On the one hand, more electronic equipment such as data processing equipment was purchased from China,” said Grimme. This is probably a consequence of the increased work from home, which necessitates additional investments in IT products such as laptops and monitors. “On the other hand, the global demand for medical protective equipment increased considerably,” said Grimme. So the Chinese export of mouth and nose masks was increased.

 The  global criticism of Germany – despite the decline – still very high surplus in the current account is unlikely to end. In terms of economic output, it fell to 6.9 percent in 2020 from 7.1 percent in 2019 and thus for the fifth time in a row since its peak of 8.6 percent in 2015. “That is still a very, very high figure – especially in comparison with other large export nations,” emphasized Grimme. “However, the European Union considers a maximum of six percent to be sustainable in the long term.” A value that has been consistently exceeded since 2011.

 The  EU Commission, like the International Monetary Fund (IMF), refers to the deficits that are faced by such large surpluses and warns of the high debts of the countries concerned. In China the surplus only accounts for 2.1 percent of economic output, in Japan 3.2 percent.

Berlin (Reuters)

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