The main doubts are how long will it last – which depends on the true decoupling capacity that emerging economies will display – and how long will developed economies’ growth hold. Here, accumulating a current account surplus can help. For example, the high levels of reserves in China allow financing deficit for several years and thus weather the turbulences with domestic growth. Still, one cannot rule out a prolonged period of weak activity in developed countries that ends up seriously deteriorating growth in emerging economies, particularly those specializing in goods demanded in the former. Globalization, where countries sell their products in global markets rather than in specific economies, certainly supports the aforementioned decoupling, but it also spreads the effects  BIS Review 124/2008  5  of financial shocks around the world. We have seen international stock exchanges plummeting, and risk premiums of emerging economies rising (figures 15 and 16). Also, large foreign exchange fluctuations have occurred, but this is good news, because the exchange rates are helping the adjustment (figure 17). Asset prices show no decoupling but, as we well know, price corrections may limit the adjustments in quantities. The key to this is whether price corrections are helping to avoid fluctuations in output or are being conveyors of the problems. The good performance of emerging economies should not lead to unfounded optimism or vanity, because this is largely the result of sound macroeconomic policies, and in such we must persevere. Final remarks I will finish with four points.
Jean-Pierre Roth: Foreign trade is Switzerland’s growth driver Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at OSEC Business Network Switzerland, Zurich, 17 April 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Foreign trade has played a major role during the present economic cycle. Over the past two years, it has made an exceptional contribution to GDP growth – with figures that bear comparison to the two upswing periods of the mid-1980s and mid-1990s. This strong export performance not only reflects a reorientation to accommodate the world economy’s new growth hubs, but is also the result of successful sector specialisation and the Swiss export industry’s premium-quality positioning. Switzerland’s watchmaking and pharmaceutical industries have been particularly impressive in this regard. Thanks to the speed at which its export industry has been able to adapt to global demand, Switzerland is well placed to benefit from the prevailing increase in earnings within the emerging markets. By specialising in the technology segment and tailoring its exports to customer needs, Switzerland is not only able to reap the rewards of upswings in the global economic cycle.