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Germany Country Analysis

Germany is one of the largest countries in Europe, with an area of ​​357 thousand km² and a population of 83.6 million. In terms of population, Germany ranks second among the European Countries following Russia and the first country among the EU Countries. Germany is a federal republic of 16 states. The country is one of the key actors in the world economy and politics with its leadership position in the EU, and with its strong economic, industrial, commercial, and technological structure. Germany is the world's most developed industrial country after the United States and Japan. Besides, Germany is the major trading partner for imports and exports of Turkey.

33% of Germany's land area is forest, which is 11.4 million hectares with over 90 billion trees. Germany has lowlands in north, uplands in center, Bavarian Alps in the south. Agricultural land in the country is about 17 million hectares and the forest land of the country is 11 million hectares. 12.1 million hectares of the agricultural land is of arable lands and continuous plants, 4.7 million hectares are of continuous meadows and pastures. 

Although agriculture, forestry, and fishing constitute 1% of the GDP, this sector has major importance in terms of the country's social dynamics. Germany's self-sufficiency in terms of the food industry is about 70%.

Since Germany’s oil and mineral ore resources are limited, it is a foreign-dependent country on a vast scale.  Along with this, it has natural gas resources that could meet the one-fourth of the domestic consumption, and also rich in hard coal, brown coal, and salt mines. Apart from that, on the borders of the south, Germany extracts potassium of which old East Germany was once one of the biggest producers back in the day, and also uranium, cobalt, bismuth, and antimony ore in small amounts with Czechia. However, Germany is generally poor in terms of metal and mineral resources.  Germany ranks first among EU countries in the field of renewable energies. It is stated that the country is the first major renewable energy economy among the developed economies of the world. The energy policy of Germany's Social Democrat-Green coalition government (1998-2005) was born under the sign of ecological modernization.

Germany, which is the major import and export partner of Turkey with its high purchase power, is one of the most developed industrial countries in the world after the USA and Japan. With its 83.6 million population, Germany stands as the most important and the biggest market of the European Union. The manufacturing industry and related service sectors are the core of the German economy. While the principal manufacturing sectors are; automotive and chemical industry, the telecommunication sector has also become one of the main industries in recent years. On the other hand, while the steel manufacturing sector in the Ruhr region has shrunk significantly, the agriculture industry has also lost its importance. As in other industrialized countries, the importance of the services sector has increased gradually in Germany. As of 2018, the services sector constitutes 61.9% of the economy.

Prominent Sectors

Agriculture

Agriculture, forestry, and fisheries are of great importance for the social structure of Germany. The country's agricultural policy is shaped within the framework of the EU's Common Agricultural Policy (CAP). The basic principles of CAP are to ensure the free movement of agricultural products in the EU, except for health reasons, and to ensure stability by protecting the domestic market from fluctuations in world prices.

Industry

The manufacturing industry is still the backbone of the German economy. Almost all industrial goods are produced in Germany, the third-largest economy in the world, but the country's power in the industry is predominantly from the vehicles, capital goods, chemicals, and white goods sectors. On the other hand, in Germany, where the aviation and computer hardware industries are less developed, the production and export of high technology products have a smaller share compared to other leading industrialized countries. Although the country has many internationally recognized companies in the manufacturing industry, medium-sized companies are considered as the backbone of both the manufacturing industry and the German economy.

Mining

The most important natural resource in Germany is coal. Germany is the world's biggest coal producer country. The country has 2.5 billion tons of hard coal (the technically available amount is a total of 82.961 billion tons) and 40.4 billion tons of lignite reserves. Apart from this, there are no important energy sources in Germany. Lignite is mostly extracted in the west and east of the country, especially in the states of North-Rhine Westphalia, Saxony, and Brandenburg. Since it is not economical to carry lignite over long distances, a significant amount of lignite is burned to generate electricity in power plants. Therefore, the facilities are located near the area where lignite is extracted. Hard coal is extracted in North Rhine Westphalia and Saarland. Since most of the hard coal plants use imported products, the plants are spread across the country. The reason for this is that the removal of hard coal deposits in the country is very expensive compared to the World market due to its rather deep and complex geological location (the average cost of extracting a ton of hard coal in Germany is 180 EUR; the average of imported hard coal is 79 EUR per ton). Potassium is among the other main minerals extracted in the country, and also uranium, cobalt, bismuth, and antimony are among the rare minerals extracted as in small amounts. However, the country's metallic mineral resources are very limited.

 

Construction

The construction industry has an important place in the German economy. The European construction market grew 5% in 2017, generating $ 112.2 billion in revenue. 2.5 million skilled workers are employed in the sector where more than 400 thousand small and medium-sized companies are in the business. Housing constructions have a major role in this growth in the sector. 

Tourism

Tourism is one of the important sectors in the German economy. According to the UN World Tourism Organization's 2017 Report; the number of foreign tourists coming to the country in 2016 is about 36 million people and the income is around 37 million dollars. According to the Travel & Tourism Competitiveness index, Germany ranks 3rd in the world.  The most important tourism regions of the country are Bavaria, Baden-Württemberg, and Rhine Valley in the West, Berlin, Dresden, Thuringia, and Harz Mountains in the East. Hosting Cebit, the world's most important information technologies (IT) fair, Hannover and Frankfurt are the center of attraction for the global business world, both with trade fairs and other business activities.  Germany is a country mostly visited by European tourists. Germany is mostly visited by Dutch tourists every year.

Germany’s Import from Turkey

While Germany imported $5.8 billion worth of goods from Turkey in 2001 and its share in the total import of Germany was 1.2%. Germany’s total import value from Turkey in 2018 was $19.3 billion and $17.7 billion in 2019. Germany’s import value from Turkey constituted 1.5% in 2018 and 1.4% in 2019 of the total import value of Germany. Germany's imports from Turkey decreased by 8.4% in 2019 compared to the previous year and increased by 204% compared to 2001. The share of the imports from Turkey in the total import of Germany didn’t show any radical changes. While the highest import value of Germany from Turkey was in 2018 with 19.3 billion dollars, the highest share of the imports from Turkey in Germany's total import value was in 2016 as 1.6%.

When the ratio of the export from Turkey to Germany is analyzed, it is seen that the ratio was 18.6% in 2001, 11.5% in 2018, and 10.4% in 2019. This shows that the exporters in Turkey, have reduced their target market focus over time and turned towards the markets other than Germany. You can find a detailed analysis of the data in the table below.

In the following table, the total number of products, import & export values of Turkey and Germany and also global figures are shown. In 2018, 5.854 different products, which had 6-digit HS Codes, were imported and the total import value of them was about $19.7 trillion. When the export figures are analyzed, in 2018, 5.660 different products, which had 6-digit HS Codes, exported and the total export value of them was about $19.3 trillion.

In 2018 Turkey exported 4.729 different products, which had 6-digit HS Codes, and the total export value of these products was $168 billion and the ratio in world export was 0.9%.  In 2018 Turkey imported 4.788 different products, which had 6-digit HS Codes, the total import value of these products was $223 billion and the ratio in world import was 1.1%. In 2019 Turkey exported 4.661 different products, which had 6-digit HS Codes, the total export value of them was $171.1 billion. Also in 2019 Turkey imported 4.753 different products, which had 6-digit HS Codes, the total import value of them was about $200.7 billion. The shrinkage in global commerce in 2019 didn't affect Turkish exporters and even though the number of exported products decreased, the export increased by 2% according to the private trade system.

Germany imported 5.233 different products in 2018, which had 6-digit HS Codes, the total import value of them was about $1.29 trillion and its ratio was 6.5% in the global import of Germany. In 2018 Germany exported globally 5.097 different products, which had 6-digit HS Codes, and the total export value of these products was $1.56 trillion and the ratio in world export was 8.07%. In 2019, Germany exported globally 5.102 different products, which had 6-digit HS Codes, the total export value of them was about $1.49 trillion. While the number of products exported by Germany increased, the amount of export decreased.

In 2018, while Germany imported 5.233 products, which makes 89.4% of 5.854 products that were imported globally, it exported 5.097 products, which makes 90.1% of 5.660 products that were exported globally. That indicates that Turkey’s focus on Germany both for imports and export is not sufficient and there are many products in terms of foreign trade. 

Source: Kocaeli Trade Chamber - Germany Country Report, TIM - Germany Target Market Country Analysis April 2020 Report

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