Trade surplus
There is a trade surplus if the exports (exports) of a country during a certain period (e.g. one year) measured in monetary units are greater than the imports (imports). The export surplus is shown as a balance on the liabilities side of the trade balance . A surplus is considered to be an indicator of the competitiveness of a country and specifically of the industries whose exports contribute to the trade surplus.
Other terms are foreign trade surplus, active (external) trade balance or positive (external) trade balance.
The term active trade balance was first used by Francis Bacon in 1615 .
Further definitions
When exports are greater than imports, the trade balance shows a credit balance. It is known as the foreign trade surplus and appears in the graduated representation of the balance of payments with a positive sign; therefore one speaks in this case of an active foreign trade balance. If the total of exports exceeds the total of imports, one speaks of an active or positive trade balance or of a trade balance surplus.
classification
| Balance of payments | I. Current account | trade balance |
| Service balance | ||
| Earnings and property income | ||
| Ongoing transfers | ||
| II. Transfers of assets | ||
| III. Financial account | Direct investment | |
| Securities transactions | ||
| Financial derivatives | ||
| Credit transactions | ||
| Other investments | ||
| IV. Change in currency reserves at transaction values | ||
| V. Balance of statistically non-breakdown transactions | ||
Exports and imports of material goods are listed in the trade balance. The data of the German trade balance are obtained by the Federal Statistical Office via intra-trade statistics (recording trade between the member states of the European Union) and extra-trade statistics (recording trade with countries outside the EU).
Like all partial balances, the trade balance usually does not have a balanced account. The balance of the trade balance is recorded with the balances of the services balance, factor income balance and balance of current transfers in the current account. This in turn is a partial balance of the balance of payments .
If an economy has a surplus in the trade balance, this means that it must also have a surplus in the capital account (principle of double-entry bookkeeping ). This results in a net capital export, domestic claims against foreign countries increase or domestic liabilities towards foreign countries decrease. The capital export includes the acquisition of assets abroad, for example in the form of the purchase of companies ( direct investments ), land and houses, securities and so on. The granting of bonds abroad also counts towards capital exports.
Factors influencing the trade surplus
Changes in exchange rates
Open goods markets enable a choice between domestic and foreign goods. It depends primarily on the real exchange rate - the relative price of domestic goods expressed in units of foreign goods.
A devaluation of the domestic currency usually leads to a decrease in import demand due to the increase in import prices (consequence: imports decrease) and to an increase in export demand due to the decrease in export prices (consequence: exports increase). This leads to an improvement in the trade balance if the Marshall-Lerner condition is met. This is the case when exports increase enough and imports decrease enough to offset the rise in import prices. In reality, it has been shown that after a devaluation there is initially a deterioration and only later an improvement in the trade balance. This process is also known as the J-curve effect.
Changes in real income
If domestic income falls, this leads to falling imports if the exchange rate remains constant. If, in turn, the income of foreigners increases, this leads to increased exports from the domestic perspective. Both processes lead to an increase in the trade balance.
Changes in demand
A fall in domestic demand for goods (e.g. through lower government spending , tax increases, lower consumer spending on goods with shares from abroad) leads to a fall in domestic production combined with a reduced import of goods for this production and a trade surplus.
An increase in the foreign demand for goods leads to an increase in domestic production and consequently to a surplus in the trade balance; This is based on the assumption that the value for imports for production increases as well, but not as much as the value for exports.
Trade surplus in Germany
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The German economy is heavily dependent on exports. At the same time, as a country poor in natural resources, Germany is also dependent on imports (especially energy).
Exports (exports) in 2017 were around EUR 1.27 trillion, up 6.2% on the previous year. As in the past, Germany is one of the countries with the largest exports of goods worldwide. With a share of around 18%, cars and car parts are Germany's most important export goods. Machines (15%) and chemical products (9%) follow in second and third place of the most important export goods. These three industries account for 42% of German exports.
Imports (imports) increased by 8.3% to around 1.03 trillion euros in 2017. The foreign trade balance closed in 2017 with a surplus of approx. 245 billion euros from, slightly less than 2016 (249 billion euros)
Trade surplus with member states of the European Union
A current account surplus of a member state of the European Union compared to the other EU states is classified as threatening stability. The limit from which it is considered to be a threat to stability was set at six percent of gross domestic product or at three percent in the event that the state budget also shows a deficit. A current account surplus that is above the limit gives rise to an examination, and a permanently increased current account surplus can lead to criminal proceedings.
In 2014, goods to the value of 657.3 billion euros were exported from Germany to the member states of the European Union and goods to the value of 599.9 billion euros were obtained from there. Compared to 2013, exports to the other EU countries rose by 5.4% and imports from these countries by 3.6%. In 2014, Germany's neighbor France remained the most important export country. Exports to the value of 101.9 billion euros were recorded here. The USA and Great Britain followed in the next places.
Trade surplus with third countries
In 2014, goods to the value of 476.2 billion euros were exported to countries outside the European Union (third countries) and goods to the value of 316.6 billion euros were imported from these countries. Compared to 2013, exports to third countries rose by 1.5% and imports from there fell by 0.9%.
European Union trade surplus
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
EU-27 trade surplus (€ bn) |
56.3 | 18.0 | 71.5 | ||
EU-28 trade surplus (€ bn) |
49.3 | 11.1 | 64.2 | 32.0 | 22.9 |
| Gross domestic product EU-28 (billion €) |
13,559 | 14.001 | 14,711 | 14,910 | 15,320 |
EU-28 trade surplus as% of GDP |
0.4% | 0.1% | 0.4% | 0.2% | 0.1% |
In 2015, the EU's trade surplus with the USA amounted to 157 billion US dollars (German share of this: 75 billion US dollars).
China trade surplus
In 2009, the PR China was the world 's first export champion. In the 2nd quarter of 2007, China was already the export world champion (ahead of the USA). From 1978 to 2006, China's share of world exports rose from 0.8 to 8.0 percent. According to Germany Trade and Invest (gtai), the export successes of the Middle Kingdom are only marginally based on cheap products. With an export share of 18.5 percent, China is already the largest supplier in the electronics sector, as is it for electrical engineering with 13.4 percent. In the steel sector, the country was just behind Germany (8.8 percent) with an export share of 8.7 percent.
In 2007 China had a trade surplus of $ 262.2 billion (then around 180 billion euros), 47.7 percent more than in 2006. China's most important trading partners are the EU, USA and Japan.
In 2016, Germany's current account showed around 297 billion dollars, that of the world's largest trading nation, China, around 245 billion dollars. With 8.6 percent of the gross domestic product, Germany exceeded the 6 percent mark of the European Commission, which is considered to be a threat to stability. The Ifo Institute described Germany as the “largest capital exporter in the world” because the money goes into tangible and financial assets in the rest of the world on the one hand and flows directly or indirectly to crisis countries on the other.
During the COVID-19 pandemic in the People's Republic of China, China imported significantly less than before. In May 2020, 16.7% less was imported and 3.3% less exported than in May 2019. As a result, the foreign trade surplus rose to a record level in May 2020.
Footnotes
- ↑ Joseph Schumpeter , (Elizabeth B. Schumpeter, ed.): History of economic analysis . First part of the volume. Vandenhoeck Ruprecht Göttingen 1965. p. 435, note 19. Cf. also WH Price: The Origin of the Phrase Balance of Trade . In: Quarterly Journal of Economics , Volume XX, November 1905, p. 157.
- ^ Adam Reining: Lexikon der Außenwirtschaft , Oldenbourg 2003 (Reprint 2014), p. 34
- ↑ Brümmerhoff, Dieter : National Accounts . Munich, 2002, p. 165
- ^ Rose / Sauernheimer: Theory of Foreign Trade , 11th Edition, Munich, 1992, p. 9
- ↑ Blanchard / Illing: Makroökonomie , 4th edition, Munich, 2006, p. 535
- ↑ Federal Statistical Office (Destatis): subject area foreign trade. Retrieved November 16, 2017.
- ^ German export surplus: Too great imbalance in the EU. taz, November 13, 2013, accessed November 20, 2013 .
- ↑ a b German exports in 2014: + 3.7% compared to 2013. In: Press release No. 038. Federal Statistical Office, February 9, 2015, accessed on May 3, 2015 .
- ↑ International trade, by reporting country, total product , Eurostat, accessed on March 8, 2017
- ↑ EU member states (including Switzerland and Norway): 2015 , Economic Growth EU, accessed on March 8, 2017
- ↑ Federal government dismisses Trump advisors , Der Spiegel, March 7, 2017
- ↑ World trade: China is the new world export champion. In: Spiegel Online . February 9, 2010, accessed June 9, 2018 .
- ↑ World article about China as the new world export champion Processing status : December 21, 2007. (Accessed: May 14, 2008, 16:50 CET)
- ↑ Germany 2016 world champion in capital export - USA in capital import , Ifo Institute, January 30, 2017
- ↑ spiegel.de: China's foreign trade collapses - and reaches a record surplus
literature
- Bellendorf, Heinz (1994): The international competitiveness of the German economy in global structural change , Frankfurt a. M., Peter Lang Verlagsgruppe, ISBN 3-631-46989-6
- Blanchard, Olivier; Illing, Gerhard (2006): Macroeconomics , 4th edition, Munich, Pearson Studium, ISBN 3-8273-7209-7
- Dieckheuer, Gustav (2001): International economic relations , 5th edition, Munich, R. Oldenbourg Verlag, ISBN 3-486-25806-0
- Reining, Adam (2003): Lexikon der Außenwirtschaft , Munich, R. Oldenbourg Verlag, ISBN 3-486-27416-3
- Rose, Klaus; Sauernheimer, Karlhans (1992): Theory of Foreign Trade , 11th Edition, Munich, Verlag Franz Vahlen, ISBN 3-8006-1655-6
