Future Conflicts

BERLIN/SINGAPORE (Own report) - Despite the Euro crisis, leading German industrial circles are currently holding an "Asia Pacific Conference" in Singapore to explore new possibilities for investments in and exports to Southeast Asian countries. Whereas the economy in Europe and the USA will still need quite some time to recover, the Asian market has already overcome the economic crisis and is again booming, according to the executive directress of the German Asia-Pacific Business Association (OAV). It is therefore absolutely essential to expand German business relations in Asia. German exports to the Asian Pacific region have already increased by one third in the first two months of this year in comparison to last year's volume. 16 percent of Germany's exports are to Asia, gaining therefore in importance in relation to exports within the Eurozone. The current Asia-Pacific Conference is focusing on China's Southeast Asian neighbors, with whom Germany is cooperating to thwart the growth of Beijing's influence.

High ranking government and business representatives from all over Southeast Asia have gathered with numerous managers and politicians from Germany in Singapore for the 12th Asia-Pacific Conference of German Business, which opened yesterday. The German Minister of the Economy, Rainer Bruederle; has been announced to participate in the opening panel on Friday and in the closing session on Saturday. ASEAN General Secretary Surin Pitsuwan is due to speak at the conference. Ambassadors from Germany and five Asian countries (China, India, Indonesia, Japan and Singapore) are scheduled to hold talks with business representatives on Saturday. The German Minister of the Economy, Rainer Bruederle and BASF CEO Juergen Hambrecht, who is Chairman of the Asia-Pacific Committee of German Business, are presiding over the conference. The conference is sponsored by the crème de la crème of German companies, including Siemens, Bayer, BASF, Daimler and Commerzbank.

Export Boom Despite the Crisis

Unlike Europe and the USA, the Asian market has overcome the economic crisis and is again booming, according to Monika Staerk, Executive Directress of the German Asia-Pacific Business Association (OAV).[1] It is therefore important for German businesses to enhance their efforts to expand in Asia. German exports to the Asian Pacific region are already increasing. Exports to this region during the crisis year 2009 had decreased less (-4.5 percent) than those to the rest of the world (-17.9 percent on the average). During the first two months of 2010, the average growth in exports was 3.8 percent in comparison to last year, whereas exports to the Asia Pacific region increased by 32.5 percent. German exports to China have been particularly important. These exports – contrary to the general trend – rose 7 percent during the crisis year, 2009 and in the first two months of 2010 by 52.2 percent. In 2009, China's share of German exports had increased by 1 percent to reach 4.5 percent. China ranks 8th as German export market.

Stabilized Profits

German industry openly recognizes the significance of the extremely rapid growth in Asia – many speak of the dawn of a "Pacific Century". According to a recently published paper by the Asia-Pacific Committee of German Business, the Asian market "had considerably contributed to a stabilization of business volume and profits for many German enterprises."[2] "The German national economy benefited also from the opening of the Asian market through on-site production." Business relations must therefore be expanded, which would call for an enhancement of the "competitiveness" of German enterprises, says the OAV managing directress, meaning, of course, the usual drop in wages and cuts in social security contributions. As a matter of fact, the demand to enhance "competitiveness" in relation to Eastern Asia means the continuation of the German low-wage policy, which has led to the accentuation of the economic dichotomy between Germany and the countries of the southern Eurozone and therefore contributed to the emergence of the current crisis. (german-foreign-policy.com reported.[3])

Centrifugal Tendencies

For Germany, the significance of this policy grows with the volume of German exports to Asia. Two and a half years ago, these were but ten percent of total German exports, but today they already amount to more than 16 percent.[4] This gives a steadily growing significance to Asian exports in comparison to exports within the Eurozone (43 percent of total German exports). In relationship to the Euro-crisis, the BASF board Chairman, Juergen Hambrecht stated that the common currency has so far been "a great success story" for his company and numerous others, because it has made exports cheaper and less complicated to other countries within the Eurozone. If exports inside the Eurozone should lose their current importance, business ties to the Euro would also subside. Germany's withdrawal from the common currency, as is now being discussed, would suffer a significant loss of its dissuasive potential.[5]

Military Equipment

The development of the German export flow demonstrates how the shift of global political power from the Atlantic to the Pacific is reinforcing centrifugal forces in Europe, just as the current Asia-Pacific Conference's focus on the ASEAN member nations gives an idea of future conflicts in this booming Pacific region. The Southeast Asian countries are the arena of a strongly developing Chinese economic activity. Berlin seeks to promote German business expansion into Southeast Asia to counteract Chinese advances. The German government is simultaneously seeking to politically orient at least some of the ASEAN countries more strongly toward Germany and Europe to also politically inhibit the development of Chinese influence.[6] The dimensions these efforts can be seen in the German government's most recent Arms Export Report, according to which, two of the four top buyers of German war material are located directly in the People's Republic of China's backyard and have close political ties to the West. In 2008, the Republic of Korea had bought German military equipment worth 1.9 billion Euros, thereby surpassing the USA to become the principal consumer for German war material. Singapore, this year's host of the Asia-Pacific Conference, holds fourth place with purchases of 350 million Euros worth of war material, far ahead of NATO allies Italy, the Netherlands and Spain. Germany's arms supply to the pro-Western countries of Southeast Asia, with the objective of a long-term containment of China's influence, already shows the important frontlines of the "Pacific Century".

[1] see also Die Konkurrenten der Zukunft
[2] Asien-Pazifik-Ausschuss der Deutschen Wirtschaft: Partnerschaft mit Asien; Januar 2010
[3] see also The End of Sovereignty (II), Sparen für Deutschland and A Costly Mistake
[4] Boomende Geschäfte in Fernost; www.dw-world.de 10.05.2010
[5] see also Thinking the Unthinkable and A Costly Mistake
[6] see also "Chinas Hoflieferanten", Auf nach Asien! (II) and Anti-China Coalition


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