Wednesday 29 June 2011

Germany 10 UK 1

Much was made of the David Cameron's signing of $1.6 billion worth of contracts with China during President Jiabao's visit this week. Only I wonder how many headlines will be written about his subsequent visit to Germany.

In Germany he has signed $15 billion worth of deals. Germany is of course China's largest partner - Germany supplies car and manufacturing components for which there is great demand.

The parallel is not lost though in terms of seeing why Germany is growing at 3% and the UK at 0% currently; the UK desperately needs to adapt its economy to serve the world markets. Our financial and professional expertise is not enough and with bust banks the growth in this area will be sluggish for years to come.

This does not mean we only need to improve manufacturing, but it may help. Yesterday's blog discussion was on the demise of our poorer retail performers and in some ways this could be a good catalyst. If we can move resources from selling poor goods to creating new goods and services the country will be improved - less consumption and greater export.

The lesson for today though is to see how far we are behind our main rivals and this is a gap that needs closing fast; a hard challenge as it has cultural, economic and political dimensions and no magic bullets to answer any of the challenges - but it does remind me of the ever hopeful Leonard Bernstein quote:

'To achieve great things, two things are needed, a plan and not quite enough time.'


Old BE said...

Are you saying that the economy shrank again in the second quarter?

I have been impressed with the way that the BBC has been explaining our current problems and possible ways out on the news and in Evan Davis' series. Finally some sense from the Lefties?

Nick Drew said...

well I am pounding away here in the Ruhr doing my bit for exports to Germany

ok, so their energy policy is bonkers, but hey - it just means they need more help ...

CityUnslicker said...

BE - second quarter not done yeat. year to date the 0.5% makes up for the previous quarter 0.5% dip.

Current quarter likely to change that, nothing like the pace of germany though. UK will do well to hit 1% growth this year.