Every year in the Chinese lunar calendar is associated with one of 12 animals combined with one of five elements: metal (gold), earth, water, wood or fire. This year is the year of the fire monkey and celebrations to mark the new year take place on 8 February 2016.
Fire monkeys have large personalities but are prone to irritability. Smart, courageous, ambitious, adventurous but unpredictable. The last such year was in 1956.
What could the fire monkey bring to Switzerland?
Recent drama in the Chinese stock market could have some wondering how a fire monkey might add to the excitement. As a share of world market capitalisation, the Chinese stock market is relatively small (see map). On the other hand China’s share of global GDP is large. Second only to the US, China accounted for more than 13% of global output in 2014. So what happens to the Chinese economy matters and has an impact on global investors, including those based in Switzerland.
Trade between Switzerland and China is significant and growing. In 2014 China was Switzerland’s fifth largest trade partner (4th for imports, 6th for exports). Switzerland is the only continental European country to have a free trade agreement with China. One year after signing the deal on 1 July 2014, China-bound exports were up 3% and imports from China up 4%. In 2014, Switzerland exported CHF 8.8 billion to China, around 4.2% of total exports. The same year, imports were CHF 12.1 billion or 6.8% of total imports. Given the level of trade any significant changes in China’s economy are likely to be felt in Switzerland, at least in industries that export there. The largest export categories in 2014 were pharmaceuticals, machines and watches. Big import categories were machines, clothing and precision instruments.
If approved by regulators, the US$43 billion tie-up of ChemChina and Syngenta could bring deeper business relations with China and Switzerland over the coming year. The transaction will be the largest ever purchase of a foreign company by a Chinese firm. State-owned ChemChina has pledged to keep Syngenta’s headquarters in Switzerland so expect more Chinese business travellers in Swiss airports.
One Chinese astrologist advises that to get good return on your investments this year you will need to outsmart the monkey. Adding that you should think twice before diving in and making changes to your finances, career or relationships. This sort of advice however, sounds sensible in any year, monkey or no monkey.