Commerzbank’s Michael Pfister has analyzed the impact of the strong Swiss Franc (CHF) and the undervalued Chinese Yuan (CNY) on Switzerland’s export competitiveness, highlighting sector-specific vulnerabilities and market share shifts since 2019 [1]. According to Pfister, the Swiss franc is currently the only G10 currency overvalued against the US dollar by more than 10% based on OECD purchasing power parity, and its significant appreciation against the euro in recent years has likely exerted additional pressure on Swiss exporters’ price competitiveness [1].
While Switzerland as a whole gained market share in its largest export markets between 2019 and 2024, this gain disappears when precious metals are excluded from the data. Adjusted for precious metals, Switzerland has, on average, lost market share, revealing underlying structural weaknesses in key sectors such as medicines, chemicals, and machinery [1]. Specifically, Switzerland has lost market share across the board in its largest export category—medicines—since 2019, with some losses reaching double-digit percentage points. The majority of these losses have been to countries other than China, indicating that the weak CNY is not the primary factor in this sector [1].
In the chemicals sector, Switzerland has also suffered significant market share losses, but here China has made substantial gains at the expense of Swiss exporters and other countries, suggesting that exchange rate effects are more pronounced in this sector [1]. Conversely, the Swiss watch sector has shown resilience, with minimal impact from the franc’s appreciation, underscoring differentiated effects across export categories [1].
Pfister concludes that the complexity of these sectoral impacts makes it difficult to isolate the precise effects of the franc’s appreciation, but the data points to ongoing challenges for Swiss exporters in maintaining competitiveness, especially outside the watch industry [1].
CONCLUSION
Commerzbank’s analysis highlights that the strong Swiss franc is eroding Switzerland’s export competitiveness in key sectors such as medicines and chemicals, with market share losses particularly evident when precious metals are excluded. While the watch sector remains resilient, the overall outlook suggests continued pressure on Swiss exporters due to currency strength.