Germany Trade
Patterns
Heather, P. J. (2022, December 7)
Contents
Introduction............................................................................................................................................. 2
Economy of Germany .............................................................................................................................. 2
Trading Partners ...................................................................................................................................... 3
10 Most exported Products by Germany for 2021.................................................................................. 4
Balassa Index ....................................................................................................................................... 4
Grubel-Lloyd Index .............................................................................................................................. 5
Conclusion ............................................................................................................................................... 5
Sources: ................................................................................................................................................... 6
1
Introduction
Germany is a country in Central Europe, with a population of almost 84 million people,
making it the 19th largest country by population. The area of the country is 357,022 km 2 and
with borders Denmark to the north, Poland and the Czech Republic to the
east, Austria and Switzerland to the south, and France, Luxembourg, Belgium, and
the Netherlands to the west. The capital of Germany is Berlin, and the financial center is
Frankfurt. The land is generally flat in the north and hilly in the northeast and central region,
rising to the Bavarian Alps in the south. The currency is Euro, and the official language is
German (Deutsch). Germany has a developed free-market economy largely based on
services and manufacturing. It is one of the richest countries in the world. Exports include
motor vehicles, iron and steel products.
In the next few pages of this report there will be more detailed information given about the
country`s economy, the most in- and exported products and its partners.
Economy of Germany
Germany's economy is mixed. It enables for a free-market economy to exist in consumer
products and corporate services. However, even in these sectors, the government
establishes restrictions to safeguard its residents. Germany has a command economy in
defense since everyone benefits, although those with greater earnings pay more in
taxes. The unemployment rate of the country is 5.3% for 2022, which shows that Germany is
have an issue with the unemployment, but the government is doing good, because in 2009 it
was 8.1%. Statista. (2022, November 10) The GDP of the country is 963.81 billion euros and
GDP per Capita is 48,397 euros, for year 2022. Statista. (2022c, November 18) The proceeds of
sales and services are subject to VAT under the common system of the European Union at a
standard rate of 19%. Germany is a member of NATO, Organization for security and
cooperation in Europe, World Bank Group, the World Trade Organization and many more.
Shuffer, T. (2020, June 28) The latest reports of the country show that it has a surplus of 3.2 bn
USD in the Current Account and the Direct Investments Abroad expanded by 53.1 bn USD
both in August 2022. The country also has increased its Foreign Direct Investment by 40.3 bn
USD in August 2022. Germany`s Nominal GDP increased to 973 bn USD at the end of 2022.
The country has a FDI inward flow of 31 billion USD and FDI outward flow of 151 billion in
year 2021. CEICdata.com. (2018, June 1)
2
Trading Partners
Export
Import
1.United States - $144.60B
2.China - $123.59B
1.China - $120.05B
2.The Netherlands - $106.82B
3.France - $121.00B
3.United States - $88.36B
4.The Netherlands - $108.86B
5.Poland - $92.31B
4.France - $79.20B
5.Poland - $66.62B
6.Italy - $88.75B
6.Italy - $65.1B
7.Austria - $81.50B
8.United Kingdom - $77.39B
7.Czechia - $57.67B
8.Switzerland - $55.82B
9.Switzerlnand - $73.73B
10.Belguim - $60.55B
9.Austria - $53.06B
10.Belguim - $51.89B
As Germany is the Europe`s largest economy, we can see from the table above that the top
export partners of the country are the United States and China, which together with
Germany makes the world`s top three exporters. The United States and Germany are also
members of really valuable organizations such as United Nations, WTO, World Bank, which
makes the relationship between them even stronger. The biggest technology exporter for
China is Germany, presenting the whole Europe. France is also one of the top exporting
partners of Germany, because of their geographical location. They have a shared border,
which makes it even easier when it comes to taxes.
From the table we also can see that the top importing partner of Germany is China. China
mainly exports Broadcasting equipment, Computers and Office machine parts to Germany,
as it is one of the world’s leaders when it comes to technologies. (Hart, J. n.d., 2020) The
second place from the import partners is The Netherlands, because both countries have a
shred border and that makes it easier, because they are close to each other’s. Germany
mainly import Mineral fuels, oils and distillation products from The Netherlands. (TRADING
ECONOMICS. 2022) The third importing partner for Germany when it comes to imports is USA,
because as I mentioned above the United States are one of the economic leaders in the
world. Germany mainly imports Machinery, Pharmaceutical products and medical apparatus
from USA. (TRADING ECONOMICS. 2022)
3
10 Most exported Products by Germany for 2021
Products
Machinery, mechanical appliances, nuclear
reactors, boilers; parts thereof
Vehicles other than railway or tramway
rolling stock, and parts and accessories
thereof
Electrical machinery and equipment and
parts thereof; sound recorders and
reproducers, television
Pharmaceutical products
Optical, photographic, cinematographic,
measuring, checking, precision, medical or
surgical
Plastics and articles thereof
Commodities not elsewhere specified
Mineral fuels, mineral oils and products of
their distillation; bituminous substances;
mineral ...
Articles of iron or steel
Miscellaneous chemical products
Value in USD thousand
264,174,036
242,290,595
173,778,961
117,107,916
82,798,880
74,760,910
63,274,483
42,127,239
32,899,541
32,380,824
Balassa Index
When analyzing the data from the table above, we can see that Germany has 7 products that
it is exporting, which are above 1%. This on the other hand means that the country is a good
in producing and exporting those products. We can clearly see that the export of `Vehicles
other than railway or tramway rolling stock, and parts and accessories therefor` has the
highest percentages from the table. This is fact, because Germany is one of the biggest
leaders of car manufacturing. Car Production by Country 2022. They have the brands:
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Mercedes- Benz, BMW, Volkswagen. We also can see that they have comparative advantage
in producing and exporting `Machinery, mechanical appliances` with 1.44%.
Grubel-Lloyd Index
The Grubel-Lloyd Index shows the intraindustry trade for a group of products for a particular
country. If the percentage is closer to 100% that means the country has high intraindustry
trade. On the other hand, if the percentage is closer to 0% that means the country has a low
intraindustry rate.
From the table above, where the Grubel-Lloyd Index is used, we can see that Germany has a
high industry rate for 4 different groups of products with 99% for group with code 85, 89%
for group with code 73, 87% for group with code 99 and 81.5% for group with code 39. In
general, I can conclude that Germany has a good intraindustry trade, because all of the
groups with products has a higher percentage than 50%.
Conclusion
Overall, with the information from the previous few pages, I can conclude that Germany has
a good and developed economy, since it the economy leader in the whole Europe. The
country has its GDP increasing and the GDP per capita as well, which means that it is a good
country to spend your life. Germany has a developed free-market economy largely based on
services and manufacturing.
The most important product group that the country exports is from the Automobile Industry,
and this will continue in the future. The Country has also really good intraindustry trade in
general, but the country is more active in four specific product groups (Check Grubel-Lloyd
Index part above).
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