China has likely overtaken Germany as the world’s largest exporter of goods, but the boom in Chinese manufacturing that looks to have given it the crown will actually help German industry.

Many German exporters do not compete directly with the Chinese, as they have undergone a comprehensive modernization over the past two decades, moving away from consumer goods such as textiles towards high-tech industries.

There are signs that China may, in the future, catch up with and even overtake Germany in these sophisticated products. But for now, the boom in China’s manufacturing sector will raise demand for German plant machinery and high-end engineering goods, supporting a tentative, export-fueled recovery in Europe’s largest economy.

Germany, the world’s largest exporter of goods from 2003 to 2008, is heavily dependent on foreign trade for economic growth and it suffered heavily from a drop in global demand last year, when the economy shrank by a record 5 percent.

The Federal Statistics Office said last week China looked to have overtaken Germany in 2009 as the world’s largest exporter of goods, and policymakers say Germany’s recovery is tentative. Many German companies are now counting on demand from China, which is expected to return to double-digit economic growth on strong exports.

Government stimulus packages in Asia are boosting demand, and economists say there will be a greater need for investment there than in developed Western economies even long after the economic crisis is over.

I think emerging markets, especially in China, have a sound structural picture and also private indebtedness, and there is enough room for growth in the coming years. That would, of course, especially profit export nations like Germany.

View a previously written post by Mouli Cohen about international economies