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Why Switzerland is more dependent on China than I thought

An economic researcher after the other, reduces currently, the growth forecasts for the Swiss economy. Today it was the turn of the Economists of Credit Suisse,

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Why Switzerland is more dependent on China than I thought

An economic researcher after the other, reduces currently, the growth forecasts for the Swiss economy. Today it was the turn of the Economists of Credit Suisse, based in the current year, an increase of the real gross domestic product is still relatively optimistic to 1.5 (previously: 1.7) percent. As one of many risks you mention China – in particular, when the threshold should escalate the trade conflict with the United States.

However, even for the case of an amicable settlement between the world's two largest economies, China's outbound growth, should pulses fail in the coming years, felt low. In addition to the slowdown in population growth, observers point to the dramatic increase in debt: Both could bind back to the far Eastern giant Empire in a similar way, as Japan was in the 1980s.

Manageable volume of exports to China

would be investigated by The Credit Suisse today published the quarterly "Monitor"output, the question of how strongly a Chinese growth slump in the domestic economy. The findings anticipate that We would be significantly more affected than the export statistics are superficially suspect. Thus, Swiss companies export in terms of value is still almost twice as many goods in the neighbouring German Federal States of Baden-Württemberg and Bavaria than to China. It broadens the view of Germany as a whole, the volume of exports to Switzerland's most important sales market, nearly four times as large.

The Chinese market is ranked in the local "Export charts" on the area of five – with last year's flow of Goods in a volume of 12 billion Swiss francs. Our company take every 20. Export of Swiss francs in the middle Kingdom; with the inclusion of Hong Kong the share of total exports to some of the impressive 8 percent.

The volume of exports is not so straightforward, and at the same time, Swiss exports to China were also far more "immune" to Economic movements in the far East, as a German, American or Japanese. This depends on the structure of the domestic China exports: Just under half is attributable to the following sectors: pharmaceuticals, chemistry and medical technology, which have developed in the past largely independent of China's economic Constitution. If China gets next a runny nose, is expected to rise in the fever thermometer in Germany's or Japan's economy is so much higher than here.

watch sales dependent on Chinese tourists

We should not weigh but so too careless in security, such as the Credit Suisse experts stress. Because the other half of the Swiss exports to China is very much dependent on the local business. This applies in particular to the food industry, but also for two other heavyweights among the domestic export industries, namely, watches, machinery, electrical and metal industry.

The watch sector makes an exemplary way to grab that for the economic assessment of the skid marks that result from a China-shock, the country-specific export figures much. Because according to Credit Suisse, each tenth exported at "in terms of value, not even directly to China". Rather, the Chinese will buy the timepieces made in Switzerland in Hong Kong – or as a tourist in Switzerland and in the neighbouring countries. Whenever the Chinese travel behavior changes – whether it's for economic reasons or because of the security situation, the watch manufacturer to get it to feel.

Germany-effect in the auto sector

The indirect effects of the economic Storm over China in the Swiss economy are, of course, much more far-reaching. What is miracle in a market that has contributed in the past 20 years, approximately a quarter of the growth in the world economy. The Credit Suisse experts illustrate these feedback effects using the example of Germany. That the exports of our Northern neighbors are quite sensitive to the economic well-being of the Chinese people, we already know. At the same time, The Swiss exports to Germany, in turn, are strongly dependent on the pulse of the local economy; with the exception of the only deliveries in the Pharmaceutical.

For the authors, the assumption is obvious, therefore, that "the Swiss exports to Germany are influenced by the development in China". In fact, as it is called, were exported around 20 percent of the domestic exports to German customers of this, among other things, to China. Particularly pronounced this indirect dependence in the local car suppliers. It explains why the share of Swiss firms with engagement in the car sector, a certain degree of parallelism "with the economic and the stock market in China", as the Economists of the big banks hold. (Editorial Tamedia)

Created: 19.03.2019, 21:08 PM

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