In the last two years, Germany, once the locomotive of Europe, has come to a halt. Zero growth and discouraging forecasts for the future weigh heavily on the manufacturing and automotive sectors, partly due to exogenous factors such as the war in Ukraine, but also due to an outdated and shortsighted growth model that is overly dependent on exports. Major Western producers have underestimated the growing Chinese threat and are now forced to close their less profitable plants at home. The price to pay is not only economic but also political, as demonstrated by the rise of nationalist right-wing parties in the recent regional elections.
China, on the other hand, is consolidating its leadership in the electric sector. Direct subsidies in highly competitive sectors have resulted in a record trade surplus. This is evidenced by the great success of BYD from Shenzhen, which has become the world’s largest producer of electric vehicles in just a decade.
Check out the market analysis for September conducted by Lorenzo Fuscà, Head of Wealth Management, and Francesco Menini, Head of Investment Advisory at Banca Profilo.
