There was a particularly sharp rise in exports to non-EU countries, especially to Russia and China. Gratifying as the German economy’s export successes are, one must not lose sight of the flip side of this export bias. The German economy is also vulnerable to changes in the global cyclical climate, and this, in effect, constitutes the German economy’s Achilles’ heel.
This is because, at the moment, no other expenditure component is driving growth. Corporate investment, which decelerated in the first quarter, remained flat in the second quarter. Even so, the environment remains conducive to enhanced investment activity. The cost situation has eased  2  BIS Review 54/2004  and is helping to stabilise earnings.