China seen overtaking Germany as top exporter in '08

By Rene Wagner

BERLIN, Oct 24 (Reuters) - China will overtake Germany to become the world's biggest exporter of goods this year, earlier than previously expected, the DIHK German chambers of industry and commerce said on Friday.

Germany has held the top spot since 2003, but the DIHK said the rise in the value of the dollar against the euro would help China to take over this year, rather than in 2009 as expected previously.

"We will lose the top position to China this year already, even if only closely," Axel Nitschke, head of the DIHK's external trade department, told Reuters.

Nitschke said German exports were set to be worth more than 1 trillion euros ($1,259 billion) for the first time this year. But China would beat this sum slightly, even though many of its exporters are suffering badly from the global economic slowdown.

"The reason is the rise in the value of the dollar. That's why Chinese exports, which are mainly billed in the U.S. currency, are simply worth more," he said. Two thirds of German exports went to other EU countries and were mainly paid for in euros, he added.

The euro EUR= has fallen to about $1.25 from levels of around $1.60 in July.

Germany's foreign trade success has played a key role in supporting growth of Europe's largest economy.

The DIHK said China was set to strengthen its lead position as the world's top exporter next year. "The financial crisis will only hit our exporters with all its force next year, Nitschke said.

Germany has traditionally has focused on expensive investment exports, which tended to have long-term order contracts, Nitschke said. This meant many exporters could still achieve high growth rates this year despite the crisis.

China, by contrast, mainly specialised in the export of consumer goods, such as textiles and electronics, which were set to suffer less in the next few months than expensive investment goods, Nitschke said.

However, the closure last week of a big toy company in southern China which employed 6,500 people showed the problems which exporters there face. Half the firms in the toy sector that sell overseas have gone out of business this year, according to the customs administration. (Reporting by Rene Wagner; Writing by Kerstin Gehmlich)