German exports on the ropes as China overtakes

German exporters took a double hit of bad news Wednesday, with latest figures showing China had snatched Germany's title as the world's biggest exporter and industry warning the sector would not recover from the recession until 2014.

German exports on the ropes as China overtakes
Photo: DPA

The Wall Street Journal reported on its website that China had exported €663 billion worth of goods in the first 10 months of 2009, compared with Germany’s €638 billion.

The paper cited figures from the Geneva-based market research firm, Global Trade Information Services.

Meanwhile, in a sign Europe’s biggest economy is still only limping towards recovery, the latest foreign trade report by the BDI Federation of German Industries found Germany’s export sector would not return to its former strength until 2014.

The report found that after slumping 18 percent in the past year, exports would recover just four percent in 2010.

“Germany’s export industries are on the road to improvement, but the recovery process will take longer,” BDI president Hans-Peter Keitel wrote in his introduction to the report. “The export industries had to battle through a tough setback in 2009.

“At this rate, we won’t get back to pre-crisis levels until 2014.”

The figures were based on a large survey of German businesses across a wide range of sectors.

Before the global economic crisis struck in 2008, the growth in German exports was humming along at eight percent a year, the report found. Germany has traditionally been the world’s biggest exporter and one third of jobs here rely on exports.

Risks to the German economy persisted, the report said. The cheap money flowing from the expansive monetary policies of central banks could spark a new financial crisis.

Furthermore, some countries’ stimulus programs were running out. And growing protectionism through “buy national” programs were also a danger, the BDI warned.

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Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.