Merkel manufactures victory by focusing on retaining, modernizing industrial sector

By Hu Weijia Source:Global Times Published: 2017/9/25 22:23:18

While many talk excitedly about how Angela Merkel's reassuring image played a central role in the German election, less attention was paid to the economic logic behind Merkel's re-election as German chancellor.

On Sunday, Merkel secured a fourth consecutive term in office after her center-right Christian Democratic Union and its Bavarian sister party the Christian Social Union won 33 percent of the vote. Following the Brexit referendum last year in the UK and the rise of populist parties in Europe, Merkel's victory makes Germany almost the last place in the EU that has not yet been seriously affected by populist storms.

Approximately 1.1 percent of the global population lives in Germany, but about 48 percent of the mid-sized global market leaders come from the country, the Harvard Business Review reported in May. These companies have helped maintain Germany's manufacturing reputation, and they are part of what makes the nation's economy vigorous. Amid the fragile economic recovery in the EU, Germany's sustained development was the cornerstone of Merkel's inevitable victory.

Germany is one of the few developed countries whose secondary industry accounts for a large proportion of its GDP. In recent years, globalization led to the hollowing-out of the manufacturing industry in the US and most EU countries, but Merkel's policies helped Germany maintain its competitive advantage in the global manufacturing sector. For instance, the Merkel administration took the initiative in 2011 to help the country assume a pioneering role in industrial information technology under the banner "Industrie 4.0," which is a strategy aimed at digitalizing the manufacturing industry.

Advanced manufacturing led to vast numbers of new jobs being created directly on site. Germany's unemployment rate stood at 4.1 percent in 2016, one of the lowest readings in the world, while the average rate for the 28 EU states was twice as high during the same year, according to the website

Germany did not allow itself to become addicted to the blind expansion of the finance sector and, in contrast, it focused on the development of the manufacturing sector. Other countries, China included, should learn from Germany to focus more on the real economy.

Economic and social issues are always two sides of the same coin. We hope the EU can restrain the rise of populism within the bloc. The first step now is to restrain the economy's downward momentum and create more jobs.

The author is a reporter with the Global Times.


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