Germany and Japan They are great creditors of the world. The two economies, whose savings indicators are much exceeding investment and domestic consumption and, therefore, export “capital flows and assets to“ import ”from other countries, increasing the small part that they have in the rest of the world. This is a silent way to “capture” the world economy. The advantage is clear: they receive dividends, interests, rental … all those foreign assets that accumulate. The counter or the negative part is that all those capitals that leave outside Japan and Germany are not invested at the internal level. Both economies seem to demonstrate a clear preference for savings (this is almost something cultural), but A way to use this savings to “invest” in the world of a radically oppositeWhich attracts the attention of Deutsche Bank economists.
This curious phenomenon attracted the attention of analysts of the German essence after the historical Sorpasso occurred in this indicator (Pure international investment position, PIIN) This shows who is a pure lender in the world and who is a pure debtor. Generally speaking, this economic indicator indicates who finances the rest of the world (and accumulates assets) and Who needs funding from the rest of the world (Sells activity for the rest of the world in exchange for this financing). Or even more simple: creditors produce more than they consume, and that “excessive production is sold (commercial excess) and what they receive to buy assets from the rest of the world in pure conditions. For example, German purchase of Amazon shares or apartments in Benidorma They will increase the net credit of Germany.
In the middle of the ascending interest in the concept that Donald Trump’s negative policy, the genuine country of the paradigm of the negative PIN was suggested in the United States, the historical movement was made a few weeks ago between his two cited colleagues, more responsive than everything else caused a change in the “reign”. Japan has lost its global status of an external creditor after 34 years, surpassed by Germany.
Although pure foreign assets Japan has reached a historical maximum in 2024, The best behavior of foreign assets in the hands of German hands caused this change, as the Japanese Ministry of Finance recently revealed. A pure investment position in Japan increased by 12.9% -year (in the yen) last year to 533.05 billion yen, About 3.28 billion euros per current exchangeAbove 500 billion yen for the first time, but lower than the value of foreign assets in Germany, which amounted to 3.5 billion euros at the end of 2024, according to the latest data published by Eurostat. Sorpasso, registered in 1991, was canceled.
The fact that Germany and Japan stand out on this front is amazing when both historical powers occupied economic headlines for many years from their zero growth and demographic aging. Germany was stagnant from the outbreak of pandemic, and financial resources went from a conversation about the “European locomotive” to the “sick person” of the old continent. In Japan, economic growth has been a “mythological animal” for decades. After a violent crisis, The Japanese economy entered in the beginning of the 90s in what was known as a lost decadeThe period with the participation of stagnant GDP and deflation. Pouring a slightly thinner, background dynamics exceeds the fourth century. Reports constantly arise that emphasize diseases of both economies before the power of countries such as India. But the brave does not deprive the courts, and the data leave no doubt: the world owes those who owe it.
Of course, they should not do the same. Deutsche Bank Economists They analyzed these positions of creditors of both countries and found that they were completely opposite. Germany prefers to buy assets without entering into control by companies, while Japan makes bets on direct foreign investment, which usually include control of more than 10% of the company under consideration.
“The Japanese Ministry of Finance reported that its country has lost its first position as the greatest lender in the world against Germany, for the first time since 1991. This caused headlines in Germany and was not considered good news, ”they say from the German bank. As introduced earlier, in Germany there are some contradictions for this high credit position: why money leaves the country when in Germany, if the infrastructure deteriorates, and companies lose the race for global competitivenessThe field is a solution to millions of agents (government, families and companies) who prefer to invest beyond the same possibilities in Germany … and has a difficult decision if the government does not begin to carry large state deficiencies, as it seems, it will do.
Analysts B.B. They explained that this excellent credit position “coincided with a problem that has long leads to an increase in German companies (bonds and shares) instead of direct investments,” these experts say.
What does it mean? “Unlike Japan, German commercial excesses were processed mainly through institutional investors, and not by the companies themselves,” they say from DB. These are pension funds, investment funds and other financial vehicles that use German savings to buy bonds and shares in the USA, China and other countries. Germany, as a country, became an “investment state in a portfolio”, while Japan is a large direct investor, seeks to create new companies, new factories or take control of the company, or at least influence their direction and decisions with the entry into advice.
The big question is that this big difference shows that a small familiar eye may seem trifles? “Although Germany and Japan have almost equal assets positions (approximately $ 3.5 billion each)Their interests in the global economic system are very different. Foreign investments in Germany are less persistent. This has two important consequences. On the one hand, this makes Germany more susceptible to criticism that its commercial excesses in relation to certain countries did not create employment directly in them (without taking into account the indirect consequences of investment in the portfolio). This may be a problem in commercial negotiations, ”they indicate from Deutsche Bank.
Japan and its direct foreign investment (PII)
On the contrary, Japan, with its investments, provides work with the opening of new companies or factories, although it can also destroy it, whether in companies where shareholders are introduced to make voting decisions for the implementation of abbreviations. However, in general, it is believed that direct foreign investments (PIIs) in any case strive to improve the productive system in which it is invested, while investments in the portfolio, such as Germany, only intend to “put a pan” to receive income.
From Germany it was also said that this pure credit position can be a “political dynamite” for the country. “From an economic point of view, the great positive Pin of Germany can mean fortress. A rich and elderly country, like GermanyWith an almost constant excess of the current account, he needs to continue to accumulate large parts of foreign assets, which will systematically decrease as the future demographic decrease. Politically, however, the great external assets of Germany represent a dynamite that can use against the country’s own interests ”, warns a note from the economic officer of the Montari and the Forum of Financial Institutions (OMFIF).
“This is because Germany is the largest owner of assets in the potentially very unstable connection of 19 European members Debtors and creditors of the European Monetary Union, ”explains David march, author of the note. Looking at the Italian debt of the 2018 crisis with its EuroSrkeptic government, the march relates to constant pressure towards Germany in order to promote the European Central Bank (ECB) in the quantitative relaxation of the Eurozone after the Great Crisis.
But not everything is inconvenient for Germany: “On the other hand, a low share of direct investment makes The pure asset position in Germany is more liquid and functional than the position of JapanThis field should be an advantage at the time of geopolitical fragmentation, because, if necessary, it facilitates the redistribution or even rapid repatriation of foreign assets, ”the culmination of these experts. That is, if they are poorly given, Germany can sell its assets and run away. Japan, on the contrary, will have more difficulties in selling factories or companies abroad, since they are less than liquid participation.
