Exporters should take advantage of long-term foreign exchange movements.
Many experts talk about how lucky Sweden is because it is not in the Euro. 10 years ago the exchange rate was SEK 9.25 and for 12 short months in 2009 it fell to a peak of SEK 11 and since then it has hung around the SEK 9.25 level. So much for being a free agent – it has basically followed the Euro which where the Swedes sell most of their exports. Swedish exporters have hardly benefited from any devaluation of the SEK.
Exporting to Russia today is no fun. They now have such a devaluation! Sanctions are not really a problem when you look at their weak economy, despotic political management and widespread corruption. Good luck East Office in trying to convince exporters otherwise…
The American market is more interesting because of purchasing power but they have regulations and a rather hostile legal system when something goes wrong. It is still a reasonable bet with the dollar being strong against the Euro. This is a better bet and the language shouldn’t be a problem.
The UK is also well placed as with such a strong GBP – almost 25% stronger when compared to 2008/2009 peak levels.
But the best place today is China. The Renminbi is around 40% from its peak… Language and culture is a problem but it is easy to fly there and what wonders await the lonely traveler. Having spent one month in Hainan learning to read and write Chinese after 2 years daily homework, I can strongly recommend that efforts should be redoubled. It is a market of great opportunities. So where is our Chinese Office? It looks like our business leaders have really missed the boat this time and sit in East Office waiting for the cows to jump over the moon…
By the way, we are part of the single currency union so keep on selling to the other Europeans. It should be relatively easy if you have invested in productivity at the workshop.
Where should exporters focus?
7 december 2015