Why is Germany So Economically Successful

Germany is the most economically developed country in Europe

Germany is the most economically developed country in Europe, and its GDP ranks first in Europe throughout the year.

Europe has many old and powerful economically developed countries, such as England, France, Germany, Spain, and Italy. Among them, Germany has the best economic development. After World War II, Germany gave up its military ambitions and devoted itself to economic construction and technological development. It became the most economically developed country in the European Union and the entire European Union, with its GDP ranking first in Europe all year round.

Advanced technology industry

Germany is very advanced in science and technology industry. It is a country with a complete industrial system. German Industry 4.0 is one of the most exciting strategic interpretations in the world, and is an important part of the fourth industrial revolution.

Main industry

Main industries: steel, coal, cement, fossil fuels, chemicals, plastic products, production machinery, automobiles, machine tools, electronics, food and beverages, shipbuilding, aerospace industry, optics and medical equipment, pharmaceuticals, textiles, agricultural product.

Import and Export

In terms of import and export, Germany is one of the world’s largest exporters. Exports come from automobiles and machine tools, and trade partners are mainly the United States, China, and France.

Germany is an important trading partner of the world. The main products exported are automobiles and auto parts, machinery, data processors, electronics and chemical equipment. These four product categories account for nearly half of German exports. Germany is the “most open” national economy among the G7 countries.

Direct investment in foreign countries

High participation in the world economy has always been reflected in German direct investment in foreign countries. It has grown five-fold since 1990, far exceeding 10 trillion euros (2018). Nearly half of these investments are in Europe. On the other hand, 26,000 foreign companies employ more than 3.7 million German employees in Germany. The stock of foreign direct investment in Germany reached 540 billion euros.

• 

Important logistics transshipment center

Germany is also a transshipment destination for European and global goods, and its transshipment volume ranks first in the European Union. Approximately one third of sales in the ten most important logistics markets in the EU are realized by Germany. 3 million people are engaged in the logistics industry. The Port of Hamburg is the gateway to the world, where about 9 million standard containers are transferred every year.

Global export value

According to data released by the German Federal Statistical Office, in August 2021, the total value of German exports to the world reached 104.4 billion euros and the total value of imports reached 93.8 billion euros. The total export value increased by 14.4% compared with the same period last year, and the total import value increased by 18.1% compared with the same period last year.

Germany’s trade surplus in August 2021 reached 10.7 billion euros, and the trade surplus in the same period last year reached 11.9 billion euros. The seasonally adjusted August trade surplus reached 13 billion euros. In addition, the current account surplus of Germany’s balance of payments in August 2021 reached 11.8 billion euros. In addition, the current account surplus of Germany’s balance of payments in August 2020 reached 16.7 billion euros.

• 

Is the stock market in Germany developed?

Germany’s financial industry and capital market are not as developed as the United States and the United Kingdom. Compared with the American stock market, the German stock market plays a relatively minor role in the entire economy.

The share of German stock trading in GDP is 35%, which is significantly lower than the US’s 132% and the UK’s 95%, as well as France and Japan. The situation in recent years is almost at this level. Germany’s domestic credit supply accounts for only 141% of GDP, which is also lower than the US’s 245% and Japan’s 374%.

Even large German companies rarely publicly issue most of the company’s stock. In German stock companies, on average, only 50% of the shares are publicly issued, and cross-shareholding among companies is common.

Institutional investors such as pension funds, investment funds and insurance companies have little influence in Germany. This shows that the vast majority of German companies stay away from the capital market. However, it is precisely because the capital market does not play a big role in German corporate governance, even if a large company goes bankrupt, nor will there be a situation where the bankruptcy of a US company has a broad impact on the interests of minority shareholders.

Frankfurt DAX Index

DAX is a calculated and weighted index of 30 weighted stocks in the German stock market. It is generally called the Frankfurt DAX Index. It is a blue chip index launched by the Deutsche Stock Exchange and includes the 30 companies with the largest market capitalization.

MDAX is the average algorithm of the German stock market, and it has added a lot of market capitalization stocks, including 50 listed companies, which we generally call the medium-sized company index.

TECDAX is an index of German technology stocks that includes 30 companies. There is also a small-cap index S-DAX, which currently has 50 companies.

• 

Germany’s total national consumption drops

A study by the German Institute for Economic Research (IW) reported that compared with 2019, total national consumption in Germany has fallen by more than 104 billion euros.

The report said that part of the decline was due to reduced income during the COVID-19 pandemic and partly due to increased savings. In particular, the cost for clothing and shoes has been significantly reduced. As a result, total consumption has been reduced by at least 104 billion euros.

Major economic research institutions report that consumers have accumulated a total purchasing power of approximately 200 billion euros. If they put this money into consumption after the new crown crisis is over, then, in the new season, the upward momentum of consumption may be much stronger than expected.

*If you have more and better information introduce to us, please leave a message in our Forum , so that you can recommend it to friends all over the world.