Abstract
The paper describes the export situation during the recent financial crisis. Since this topic is very large, it was impossible for us to cover all of its multiple aspects and we decided only to highlight a small part of it. We confine our analysis by comparing two different types of countries; one developed against one developing country to see if their trade has been affected the same or another way by the crisis. We decided to make a comparison between Germany and China, because not only they represent a developed and a developing country, but their economies are also very export orientated.
The fact that China, an emerging country, surpassed Germany as the world's largest exporter during the financial crisis encouraged our analysis too. The main questions we tried to answer are if German and Chinese exportations have been affected differently by the global economic downturn and how it has been possible for China to become the world's biggest exporter after the crisis. It is important to mention that our analysis focuses on Mainland China only, excluding Hong Kong and Taiwan.
The paper starts by giving a general impression of the worldwide export situation over the last 10 years. We try to show that trade is much more volatile than production and GDP, which illustrates why export fell by so much in 2008‐2009. The same section provides some theoretical insight of what economists think of being the main causes of the trade collapse and we show that the trade of all sorts of products has been affected by the crisis.
The paper continues by starting the main analysis, which focuses on China and Germany. The first section of this part compares total export of both countries, including a regression which shows that the crisis had an impact on export of both countries. The following section shows how export with the different trading partners of both countries has been affected and the last section does the same by comparing the different sectors in which both countries are active.
This section gives an insight into world export development since the year 2000. We will use
quarterly data to show the exact moment in time when the trade collapse seems to take its
course. The second part compares real export growth to real production and real GDP growth. Finally, we will conclude this section be giving possible explanations why the fall in trade was not commensurate with the economic recession.
Tags: Financial crisis, economic recession, world's largest exporter, global economic downturn.
