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Germany is not China, or so Heleen Mees is eager to point out.

And quite right to do so, I might add. Aside from shared membership in the United Nations and their local Tuesday night 10-pin bowling league, the list of similarities between the two industrious nations is rather short. But on the surface, the two countries share a particularly poignant economic indicator: massive current account surpluses.

In fact, it is precisely by exporting far more goods and services than they import that both Germany and China have vaulted to the front page of the financial news in recent days. Germany, for its whopping 2.2% quarterly economic growth; and China, for (more or less) overtaking Japan as the world's 2nd largest economy.

It is now increasingly clear that the problem of global macroimbalances has returned with a vengeance. At first glance, both Germany and China's export-fueled growth appears to be making these imbalances worse, not better. But this is where Ms. Mees takes over, insisting that there are important differences between the two countries, not least in their capital accounts:

"... Germany did not accumulate foreign reserves the way that China did. On the contrary, German foreign reserves actually declined between 2000 and 2008. Whereas China is a large net recipient of foreign direct investment (FDI), Germany is a large net exporter of FDI. China’s net FDI inflow totaled $94 billion in 2008, compared to Germany’s net FDI outflow of $110 billion.

... German’s surplus is thus less damaging than China’s, as it is used for investments that foster productivity gains, economic growth, and job creation – and that often include technology transfers that help to develop human capital.

The Chinese surplus, on the other hand, being heavily skewed towards US government bonds, primarily boosts personal consumption – a process whose apotheosis came in the early 2000’s, as the Bush administration’s tax cuts, together with cash-out home refinancing and home-equity loans, turned US sovereign debt into consumer credit."

This is well-trodden ground: the Chinese proclivity towards saving resulted in having their hard-earned yuan recycled as a US consumer credit boom. According to Mees, the earnings from German GDP were largely recycled into foreign direct investment into neighbouring countries, which is productive. So: China surplus bad; German surplus good. Got it?

But then I keep reading:

"Of course, the demand generated by Chinese credit also fosters economic growth, but mostly in China, owing to booming exports to the US."

Erm, what? This is starting to smell like bullshit. Mees appears to be arguing that the Chinese current account surplus is "damaging" because the economic benefits were only seen in China. Why on earth would that matter?

Ah, but I forgot the part about Chinese savings helping to create a credit boom in the debt-laden United States. The credit boom, in turn, inflated asset bubbles that eventually had to burst. That's what makes the Chinese surplus so damaging and the German one so constructive.

Isn't that right? Ms. Mees? Oh, you're not finished:

"It is, of course, unfortunate that German banks and pension funds lent money to debt-laden countries such as Spain, Greece, and Portugal on overly favorable terms, inflating asset bubbles that eventually had to burst."

Yea, you're right: Germany is definitely not China.