Munich's economic success, popular appeal and an ambitious programme of building continue to fuel its civic rivalry with Berlin.

After German unification in 1990, there was great scepticism as to whether Munich would still continue to boast the title of Germany's 'secret capital'. Would Munich be able to defend its position as one of the top German economic centres against the rising star of Berlin? Thirteen years later the comparison could not be more stark: the state of Bavaria has the second lowest unemployment rate and the highest level of foreign investments of all the German Lander. In particular, Munich attracts foreign capital like no other Bavarian city. While in Berlin, a flailing Chancellor tries to cure the German welfare state. Bavaria - under its leader Edmund - Stoiber steams ahead towards political stability (last autumn Stoiber was re-elected with a record-breaking 62 per cent of the vote) and economic prosperity. Last year's Oktoberfest (with 6.3 million visitors) and the real estate fair Expo Real (now bigger than MIPIM), underline Munich's popular appeal and economic success.

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The city's growing reputation is inextricably linked with an ambitious approach to architecture. Over the past ten years, Munich's development boom can boast contributions from some of Germany's best architects as well as those from Bavaria's neighbours, Switzerland and Austria.

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The gateway to Munich is Franz-Josef Strauss airport which was initially opened in 1990 right outside the city boundaries. Last summer saw the completion of Terminal 2 by Munich based Koch+Partner, commissioned after Lufthansa's decision to establish their second international hub (after Frankfurt am Main) in the Bavarian capital instead of Berlin. Built in a record construction time of two years, the new terminal follows on from where Hans Busso von Busse and Helmut Jahn left off during the early 1990s.

Even if you arrive in Munich by plane, you are more than likely to take the train into the city's main railway station. Yet what is now an hour's ride could be a matter of minutes in the not too distant future. Transrapid, Germany's magnetic highspeed rail link, is destined to arrive at a new railway terminal building next to a refurbished Station Hotel (by local practice Angerer Hadler) which is now part of the Dorint hotel chain. (The old railway station is currently the subject of an invited an architectural competition.) The Transrapid is the latest manifestation of Munich's evolution into Germany's leading centre of high technology. The system faces its first commercial test in Shanghai's airport city link powered by Siemens technology from Munich, while Munich-based engineers CBP designed the raised reinforced concrete track.

Getting into Munich is more straightforward for motorists who barrel straight down the A9 motorway and connect with the orbital Mittlerer Ring. In terms of city planning, Mittlerer Ring forms the periphery of an urban high-rise development plan which actively encourages high-rise projects outside the confines of the inner city. The A9's merging with the ringroad is marked by two not yet fully completed towers: Allmann Sattler Wappner's Munchner Tor for owner-occupier Munchner Ruck and Helmut Jahn's speculative Highlight for developer Kollmann. Both developments significantly redefine this motorway junction from an architectural and urban point of view.

Driving around the ring gives a broad flavour of Munich's recent architectural developments. Next to the historically famous 'four cylinder' tower for BMW, Coop Himmelb(l)au are designing the company's new visitors' centre. Nearby, just off the ring, Christoph Ingenhoven's 40-plus storey tower (for developer Hines) will grace the skyline when completed later this year. A bare mile further down is Lanz's newly finished all glass-clad tower housing Daimler-Chrysler showrooms. Near the main railway lines is the old container shunting area which will eventually set the scene for Arnulf-Park, Munich's largest inner-city development. German developer Vivico is ambitiously marketing this 18 hectare site which by 2012 will form an 8km long business park for up to 4500 employees.

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While such developments depend on putting faith in Munich's currently struggling housing and office market, the heart of the city has already undergone a massive injection in terms of lettable space: Herzog & de Meuron's spectacular Funf Hofe shopping mall could find an architectural rival in the not quite yet completed Maximilian Hofe by Berlin-based architects Gewers Kuhn & Kuhn. Their prime site on the upmarket Maximilianstrasse, directly behind Munich's Opera House, reconciles the past by reconstructing a Neo-Classical building lost during the War, and the future in the form of an elegantly curved seamless metal clad facade. Only a stone's throw away, local architects Hilmer & Sattler redefined the city scape with their recently completed Hofgarten Palais which opened last summer, an imposing terracotta-clad block designed on behalf of developer Bayerische Immobilen.

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Any itinerary of Munich's recent development should also include projects for culture and recreation. Here, Stephan Braunfels' Pinakothek der Moderne is in a class of its own. Slender reinforced-concrete columns guard the entrance to four major art, design and architectural collections which have already become the envy of many German cities, not to mention Berlin. However, the really big sensation will be the new Allianz-Arena, a 66 000 seater sports stadium for Munich's two Bundesliga football clubs. Designed by Herzog & de Meuron with Arup Sport, the stadium is clad in a chameleon-like skin of rhomboidal ETFE cushions that can change colour when hosting different events. In 2006 the football World Cup will kick off here, while the final will take place in Berlin's refurbished Olympic Stadium a more than appropriate expression of the historic struggle between Germany's two dialectic capitals.