Vibrant Asian demand propped up Swiss trade last year despite the rising Swiss franc, as Switzerland's flagship watch industry restored its exports to pre-crisis levels, authorities said Thursday.
 

"/> Vibrant Asian demand propped up Swiss trade last year despite the rising Swiss franc, as Switzerland's flagship watch industry restored its exports to pre-crisis levels, authorities said Thursday.
 

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TRADE

Watches boost Swiss trade figures

Vibrant Asian demand propped up Swiss trade last year despite the rising Swiss franc, as Switzerland's flagship watch industry restored its exports to pre-crisis levels, authorities said Thursday.
 

Vibrant Asian demand propped up Swiss trade last year despite the rising Swiss franc, as Switzerland’s flagship watch industry restored its exports to pre-crisis levels, authorities said Thursday.

The Swiss watch industry’s federation (FH) reported a “very clear cut recovery” in 2010 as exports grew by 2.9 billion francs ($3 billion) over the previous downturn year to 16.2 billion francs.

“This growth of 22.1 percent clearly indicates a return to a healthy and robust situation for Swiss watchmaking, with a level slightly higher than the  2007 result, which was considered at the time to be excellent,” the federation added.

Swiss watch exports to Hong Kong — the biggest foreign market accounting for more than 3.0 billion francs — grew by 46 percent in a year, while China (+57%) and Singapore (+33%) were the other fastest growing export markets.

Asia absorbed more than half the total value of Swiss watch exports in 2010, growing at nearly three times the rate recorded in the Americas and Europe.

The watchmaking federation said there were already signs so far this year that the recovery was on “firm foundations” and set to continue in 2011.  

Meanwhile Switzerland’s overall foreign trade “held up well in 2010, given the strength of the Swiss franc,” the federal customs office said.

Although exporters were forced to cut prices due to the strong Swiss currency, Asia was “once again the most vibrant source of demand,” it added.  

Overall Swiss exports grew last year by 7.1 percent to 193 billion Swiss francs, while imports rose 8.4 percent to 174 billion in 2010.

The trade surplus declined for the first time since 2005, by 3.8 percent to 19.6 billion francs.

Although the surplus was dampened by a steep increase in a trade deficit with the European Union, Switzerland’s biggest foreign market, it was the second highest on record, the customs authority said.

The franc, which investors regard as a refuge currency in times of crisis, has gained 10 percent against the dollar over the past year and 15 percent against the euro amid uncertainty over the global economic recovery.

ECONOMY

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic

Despite the pandemic, 220 foreign businesses set up their offices in Switzerland in 2020.

Why Switzerland continues to attract foreign companies despite the coronavirus pandemic
Switzerland is a magnet for foreign companies. Photo by Valeriano de Domenico/AFP

While this number is 9 percent lower than in the previous year, these companies have created 11 percent more new jobs — a total of 1,168 — than in 2019. Most of the new jobs were created by companies from China, the United States and Germany.

About 3,600 more positions are expected to be offered by these enterprises in the next three years, according to data from SRF, Switzerland’s public broadcaster.

In fact, Switzerland is one of the very few countries that have been able to attract international companies to its shores in 2020, a notoriously bad year for the global economy.

READ MORE: Why Switzerland’s economy is on the up despite the coronavirus pandemic

Experts believe this is due to the country’s strengths, including political, economic and financial conditions.

“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

There are also other reasons that had prompted foreign companies to come to Switzerland in 2020, despite the economic uncertainty and travel restrictions.

“Protection of legal rights, freedom, and personal responsibility are stronger in Switzerland than in many other countries, even in times of pandemic”, said SGE’s co-president Walter Schönholzer.

Switzerland’s attractiveness is also boosted by studies showing the country’s economy remains the strongest in the world.

Even though the health crisis plunged Switzerland’s economic activity into a “historic” 8.2-percent slump in the second quarter of  2020, the country still boasts the world’s most resilient economy, according to research by an insurance and reinsurance company Swiss Re. 

The International Monetary Fund (IMF) expects a 3.5-percent rebound in Switzerland’s gross domestic product (GDP) in 2021.

It said Switzerland’s economy absorbed the shock of the pandemic better than other European countries and it “has navigated the Covid-19 pandemic well”.

IMF added that Switzerland’s “early, strong, and sustained public health and economic policy response has helped contain the contraction of activity relative to other European countries”.

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