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Business cost Swiss industries brace for impact of coronavirus outbreak

Two masked people behind Chinese flag

China finds itself in virtual lockdown to contain the coronavirus outbreak.

(Keystone / Alex Plavevski)

Various Swiss industries and the domestic tourism sector are preparing themselves for a downturn caused by the coronavirus epidemic. China is Switzerland’s third-largest trading partner behind the European Union and the United States.

China has resorted to a virtual lockdown in a bid to contain the contagion that has infected 28,000 people and killed more than 560. Swiss International Air Lines and its parent company Lufthansa have suspended flights to and from Beijing and Shanghai until the end of the month, while other destinations have been affected.

Swiss companies operating in mainland China have been forced to scale back or suspend production as staff are forced to stay at home. Engineering firm ABB has closed all its plants in its second-largest market, which accounted for 15% – $4 billion (CHF3.9 billion) – of its revenues last year.

The chemical and pharmaceutical industries have also been hit, according to the Neue Zürcher Zeitung newspaper. It reportsexternal link that a new plant built by the chemicals firm Zofinger has been shut since January 25.

Many of the 7,000 Novartis staff and the 10,000 workers employed by Roche in China have been forced to work at home rather than in laboratories. But both multinationals say they have plans in place to cope with such emergencies.

The body representing the Swiss electrical engineering, precision tools and machine building sectors told that some members had been forced to suspend production but that it was too early to calculate the impact of these disruptions on trade.

Tourists and watches

In the first nine months of 2019, China absorbed more than CHF15 billion of Swiss exports, while goods travelling the other way totalled some CHF11 billion. The longer the epidemic goes on, the greater the risk of these figures being dented this year.

Swiss tourism officials expect a 30-50% drop in the number of big-spending Chinese visitors to Switzerland in the coming weeks. Based on 2018 figures, this could represent 70,000-100,000 overnight stays per month. 

Swiss watch exports, which already suffered last year from the riots in Hong Kong, may also take a battering. Switzerland’s largest watch manufacturer, Swatch, has cancelled its “Time to Move” watch fair, which was scheduled to take place at the end of this month in Zurich, because of the coronavirus.

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This content was published on February 7, 2020 8:54 AM

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