By CARTER DOUGHERTY


MUNICH - When American consumers stop buying, companies around the world suffer - even those that do little business in the United States.

Take Hawe Hydraulics, which makes valves and conduits here in southern Germany. Its sales have boomed in recent years, driven largely by demand from China and the rest of Asia. But in the last few months, new orders have virtually dried up, almost overnight.

Only 5 percent of Hawe’s products are sold directly to the United States, but sales dropped suddenly as American companies stopped importing products from China that used its components.

“It used to be that it took years,”said Karl Haeusgen, Hawe’s chief executive, who propelled the company’s global expansion.“But now the global link works very quickly.”

The United States, with its creditdriven economy, has long ensured that others, notably China, Germany and Japan, have been able to pile up trade surpluses. That dynamic has shifted, with Americans paring purchases at a ferocious rate.

“As the American consumer now capitulates, the export bubble is the next to go,”the chairman of Morgan Stanley in Asia, Stephen Roach, said.“Export-led economies around the world are in for a very tough rebalancing.”

In Germany, the world’s largest merchandise exporter since 2003, sales drove growth for the last five years. But in the third quarter, the slump in exports helped push Germany into recession.

Virtually all economists expect 2009 to be a lost year for Germany, which will pay a heavy price for the downturn. The retrenchment bears out what Mr.Haeusgen is seeing, that there is a strong correlation between the Chinese prosperity that rested in part on American profligacy, and German sales to China and elsewhere. Germany’s industrial exports feed a Chinese economy that itself is fed by American demand for goods.

Jacques Cailloux, chief Europe economist at Royal Bank of Scotland in London, has established a strong correlation between Chinese exports to the United States and German exports to China. The American trade deficit in 2007 was $708.5 billion; Germany’s $288.
5 billion surplus and China’s $262.2 billion excess represent much of the other side of that equation.

Already, overall manufacturing orders in Germany have dropped significantly. In September, they fell by the largest monthly amount since 1990, when the economy of East Germany was disintegrating. October was nearly as bad.

Recognizing that they must sell more at home to compensate for the drop in overseas sales, many exportdriven countries have embraced domestic stimulus programs aimed at halting the slide.

Not so Germany.

The bitterest political fight in recent memory has erupted in Europe over Germany’s unwillingness to pump larger amounts of cash into its economy. The country’s economy minister, Michael Glos, fought for more stimulus to spur Germany’s traditionally weak domestic demand but lost to the finance minister, Peer Steinbruck. That prompted Mr.Glos to say laconically that maybe other countries’ packages“will help our export economy.”

This perspective resonates at companies like Hawe.

“My fear is that the Chinese are reacting more strongly, in a psychological sense, than other countries,”Mr.Haeusgen said.“Our hope is that someone decides to turn on the lights again in the next few months.”