TPT November 2010

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72 November 2010 ›
Global Marketplace
detractors of wind turbines who claim they are an ugly blight on
the landscape.” (“Wind Lens Floating Farms Could Triple Electricity
Production,” 26 July)
› As noted by Celsias.com, a site for information on climate
change, the biggest deterrent to development of wind power in
Japan has been that the electricity grid – a network of some ten
utility companies – is not fully connected. To ensure steady supply,
a spokesman for Tohoku Electric Power Co told Celsias that, as
of 2008, Japan’s fourth-biggest generator requires owners of new
windmills to store energy in batteries before distribution, rather than
send the electricity direct to the utility.
Automotive
A strong yen vis-à-vis the euro gives
German firms an advantage over their
Japanese competitors
Writing from Frankfurt in the International Herald Tribune, Jack
Ewing noted “a touch of schadenfreude” in the most recent earnings
report issued by Kuka, a company based in the Bavarian city of
Augsburg whose orange industrial robots are a familiar presence
on auto assembly lines worldwide. “Kuka said [in August] that its
sales had bounced back to pre-crisis levels – and then some,” Mr
Ewing wrote. “By contrast, sales at its Japanese rivals were still one-
third below where they had stood in early 2008, before the global
downturn slammed the machinery industry.”
True, Kuka’s rebound has been helped by an upswing in orders
from European car makers. And China’s heavy investment in
infrastructure benefited companies like Germany’s Siemens. But a
significant factor is the plunge in the value of the euro as compared
with the Japanese yen, which handed Kuka a new pricing edge
over its competitors in Japan. (“Strong Yen Helps to Fuel Germany’s
Export Boom,” 2 September)
“Price is not the sole criterion, but it’s an important one,” Kuka’s
chief executive, Till Reuter, told the Tribune. “The weaker euro is to
our advantage.”
The official currency of 16 of the 27 member states of the European
Union had fallen 19% against the yen in the ugust,
nearly double its decline against the US dollar. And the euro was
down more than 36% against the yen since August 2008. This
strengthening of the yen has favoured a number of Germany’s
exporters.
“A stronger yen is good news for German machinery and auto
companies whose main competitors often are based in Japan,”
Mr Ewing wrote. “And it is, of course, bad news in Japan, where the
strong currency has become a political issue.”
As in so many national rivalries, China – the fastest-growing market
for many German companies – is the main battleground. According
to the Munich-based Ifo Institute for Economic Research, China was
the destination for 5% of German auto exports in 2009, up from 0.6%
in 2000; and 9.1% of German machinery exports went to China, up
from 2.7% over the near-decade. In fact, according to the German
Engineering Federation, an industry group consulted by the Tribune,
German companies gained ground in China in 2009, increasing their
share of that country’s imports to 22.9% from 20.6%. Japan’s share
of Chinese imports slipped to 24.1% from 27% over the year.
› Mr Ewing observed an inclination on the part of German
company representatives to de-emphasise the importance of
exchange rates, preferring instead to discuss the superiority of their
strategies and products. A spokesman for Volkswagen said that the
car maker had been taking market share from Toyota because of the
quality of its offerings, not on account of any shift in the value of the
yen. And – to revisit the robot theme with which we began – ABB,
a Swiss company whose products include industrial robots made in
Germany and elsewhere, told the International Herald Tribune that it
had not noticed any yen effect.
Trade
Europe steals a march on the US by
ratifying a sweeping free-trade agreement
with South Korea
The European Union said 16 September that it would sign its first
pact with an Asian trade partner: South Korea. The deal was set
to be signed at a meeting of the EU and South Korea to be held
in October in Brussels, Steven Vanackere told a news conference
there. Mr Vanackere is the deputy prime minister and foreign
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