The head of Germany’s export lobby sees a prolonged fallout from China’s currency devaluation that threatens to hurt foreign sales from Europe’s biggest economy.
“We see the developments in China hitting German exports,” Anton Boerner, president of the BGA exporters’ association, said in a telephone interview. “We reckon there’s a long-term strategy behind the devaluation and that the trend could last one to two years.”
The yuan’s decline eased Thursday as China’s central bank signaled support for the currency, after the surprise devaluation triggered the steepest two-day drop since 1994. German luxury carmakers were among the biggest losers, with Mercedes producer Daimler AG dropping more than 8 percent.
Boerner said that he expects to see a drop in overseas sales for Germany’s car industry along with declines for European trading partners as China curtails its appetite for luxury goods from abroad.
By devaluing its currency, China is sending its economic problems overseas as it seeks to forcibly stimulate exports, said Boerner.
“We see with concern that the economic problems in China are greater than we thought,” he said.