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Oct 21, 2014

The Similarities Between Germany and China

The Similarities Between Germany and China

By George Friedman

"The Similarities Between Germany and China is republished with permission of Stratfor."

I returned last weekend from a monthlong trip to both East Asia and Europe. I discovered three things: First, the Europeans were obsessed with Germany and concerned about Russia. Second, the Asians were obsessed with China and concerned about Japan. Third, visiting seven countries from the Pacific to the Atlantic in 29 days brings you to a unique state of consciousness, in which the only color is gray and knowing the number of your hotel room in your current city, as opposed to the one two cities ago, is an achievement.

The world is not getting smaller. There is no direct flight from the United States to Singapore, and it took me 27 hours of elapsed travel to get there. There is a direct flight from Munich to Seoul, but since I started in Paris, that trip also took about 17 hours. Given how long Magellan took to circumnavigate the world, and the fact that he was killed in the Philippines, I have no basis for complaint. But the fact is that the speed of global travel has plateaued, as has the global economic system. There is a general sense of danger in Europe and Asia. There is no common understanding on what that danger is.

I was in Seoul last week when the news of a possible wave of European crises began to spread, and indications emerged that Germany might be shifting its view on austerity. It was striking how little this seemed to concern senior officials and business leaders. I was in the Czech Republic when the demonstrations broke out in Hong Kong. The Czechs saw this as a distant event on which they had opinions but which was unlikely to affect them regardless of the outcome.

There has been much talk of globalization and the interdependence that has flowed from it. There is clearly much truth in arguing that what happens in one part of the world affects the rest. But that simply was not evident. The eastern and western ends of the Eurasian landmass seem to view each other as if through the wrong side of a telescope. What is near is important. What is distant is someone else's problem far away.

Germany and China as Economic Centers

There is symmetry in this view. Europe cares about Germany and Asia about China. In some fundamental ways these countries have a substantial amount in common. China is the world's second-largest economy. Germany is the world's fourth-largest exporter. Both countries are at the center of regional trade blocs -- Germany's formal, China's informal. Both trade on a global basis, but both also have a special and mutual dependency on their regions. China and Germany both depend on their exports. Germany's exports were equivalent to 51 percent of its gross domestic product, or about $1.7 trillion, in 2013, according to the World Bank. China's exports equaled 23.8 percent of a larger GDP, or about $9.4 trillion.

The two countries at the center of their respective regional systems have both been extremely efficient exporters. . . .

Read more: The Similarities Between Germany and China 

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