Stop thinking of wealth as being a pie where the sum is zero. Building things in France and selling them to Germans in order to balance trade does not mean Germany gets weaker. It means both countries end up having more wealth overall. I can give a real world example of how this works. 1980's: cellular phones were extremely rare, extremely expensive, and it was a niche market. Suppose we start with 1 company making cellular phones in Germany. Someone like me comes along and say "Hey, this trade balance is messed up. France is producing zero phones while Germany is producing every phone." A person like you would say that France getting into the market of building cell phones would destroy the German economy because it cannibalizes Germany's market share. Of course, this turns out to be completely wrong because the market never works like that. With both France and Germany making cellular phones, the price of cellular phones starts to drop while the quality of them increases. The price of a modern cell phone is maybe 1/100th the price of Gordon Gekko's phone, but the user base is a million times larger.
It seems like these debates always come back to the assumption that wealth is a zero sum game. If I make and sell a bottle of wine, it somehow means a guy who makes cars loses his job. The logic is completely mind boggling. Why would a person making cars get fired if I make wine? Why would a German vacuum cleaner company disappear when an American company starts building computers? It's so retarded that I can't even draw a picture of how this could theoretically happen. People in France start chopping down trees and selling them to Britain, therefore Germany's wind power industry collapses.
Wow, you have no fucking clue how the world works. You have *a lot* more to learn.
While wealth is not a zero sum game, international trade is. In the end those who accumulate debt (reserves) either need to sell those reserves or import more goods, thus distributing those reserves back into the market. The way this balance naturally occurs is that that the accumulator sells the currency on the market, suppressing that currency, driving the cost of the imported goods up while driving the importer's goods down in relative price. The key difference here (in China and Germany's case) is that in China's case they take the reserves and lock them up in USTs, then print money in their own currency to balance the equation (causing domestic inflation). That means that the USD doesn't depreciate.
In Germany's case they merely accept Euro denominated assets and the importer's currency doesn't change (because it is the Euro). Thus, Germany beggars those countries by demanding higher and higher debt payments but not balancing the trade by importing more than they export. This twists the economies of the importing countries since they cannot balance currency wise.
This is basic macroeconomics. Every single person who studies this knows how fucked up Germany, China and Japan are since they pursued complete export economies. Everybody knows Japan is still dealing with this problem.
Yet you somehow don't get it.
Even if you don't believe me, try reading this and come back.
http://globaleconomicanalysis.blogspot.com/2011/07/hugo-salinas-price-and-michael-pettis.html
I don't agree with Mish on many points but his practical perspective here is spot on.
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