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We shall be unable to turn natural advantage
to success unless we make use of local guides.
-The Art of War, Sun Zi

Will 2019 be the Year when Foreign & Swiss Businesses do better than their Chinese Competitors?

Will 2019 be the Year when Foreign & Swiss Businesses do better than their Chinese Competitors?
February 2019

China grew 6.6% in 2018, a less than impressive figure when reading press headlines reporting the slowest growth in 28 years. Yet China added USD 850 Bio to its GDP. In fact, it is no small feat since this increase is more than the total 2018 GDP of Switzerland ($709 Bio).

And Switzerland is one of the world top 20 economies.

No wonder then, when recasting China’s economic performance in comparison of other countries GDP, that the Swiss Business in China Survey (which we co-conducted in December 2018) shows very good results for Swiss (and international) companies in 2018.

Still bad economic news abound and the future looks less than rosy when analyzingthem.
For example, China’s car sale dropped by 19% in December 2018 compared to the same month of 2017, recording its 6th consecutive month on month fall and bringing annual car sales 2.8% lower than in 2017. This is the first yearly automotive decrease since 1990 after the Tiananmen crack down. For those who have experienced the Chinese environment in the last decades, negative growth in any sector is just unheard of.

More bad news come from the Shanghai stock market. It just ended the Chinese Year with its worst loss since 2008 (-18.2%). And the official Purchasing Manager Index indicates that China’s manufacturing has been contracting for the last 2 months, at least.

The surprise, therefore, is that international companies surveyed are inordinately optimistic for 2019: overall they predict that this year will be better for their business than the last. But what is even more extraordinary is that they make such forecast while local Chinese companies see it the other way round!

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