Trade deal with China comes a step closer

Doris Leuthard shakes hands with her Chinese counterpart, Hu Jintao Keystone

China and Switzerland have entered a new phase in relations, the Swiss president said on Friday, looking forward to early negotiations on a free trade agreement (FTA).

Doris Leuthard was speaking to journalists in Beijing after a meeting with her Chinese counterpart, Hu Jintao, and the signing of a memorandum of understanding which opens the way to talks on an FTA.

“It is almost a historic day,“ a delighted Leuthard told them.

Hu had said he was ready to accept the findings of the joint feasibility study for an FTA, Leuthard reported. This means that there are now practically no obstacles in the way of starting negotiations.

By stressing that he wants to conclude an FTA as soon as possible, Hu himself had given Switzerland what Leuthard described as “a lovely present” on the occasion of the 60th anniversary of the start of diplomatic relations between the two countries.

“He spoke of a turning point in bilateral relations,“ she said, adding that it would be very interesting for Switzerland to have better access to this huge market.

The Chinese are also interested in discussing financial services, focussing on cooperation between the supervisory authorities and the central banks, she said.

She went on to express sympathy for the victims of the various natural disasters which have recently struck China, and said that if Switzerland could help, it would be ready to do so.

Time scale

Leuthard now has to present a mandate for negotiations to her cabinet colleagues, and it will subsequently be put to the parliamentary commissions and the cantons.

She hopes to receive approval for the mandate in November so that the negotiations themselves can start in December.

“We have a lot of work ahead. But it will be worth it,” she said.

Even before the end of Leuthard’s visit to China it was clear that her five-day trip had been a success.

Her intention to use the visit to exert pressure has paid off.

“This 60th anniversary is a wonderful chance to start a new phase in cooperation,” she said.

Business opportunity

Leuthard is not the only person pleased with the result; so is Gerold Bührer, head of the Swiss Business Federation, economiesuisse. Bührer, who attended the signing ceremony, believes that Switzerland will soon be the first European country to conclude an FTA with China, as it was with Japan in 2009.

“That will naturally bring relief, on the one hand on the export side, and on the other with direct investments,” he told swissinfo.ch.

Specifically, the agreement will lead to clear savings in Swiss exports to China, Kurt Haerri, president of the Switzerland-China chamber of commerce explained.

“On average we would save 10 per cent in import duties,” he said.

“What was done today gives a clear signal,” said Christian Guertler, president of the Swiss Chamber of Commerce in Shanghai.

“In the Chinese context it’s important to give such signals, and President Leuthard did just that by bringing a top-level economic delegation with her,” he explained – adding that the real work was about to start.

Positive balance

Leuthard’s visit to China started with a day in the central city of Chongqing, a major economic centre. She then spent two days in Shanghai, where she visited the expo, before going on to Beijing.

She gave swissinfo.ch a positive evaluation of her trip.

“I could not achieve much more than we have,” she said.

The Swiss day at the Shanghai Expo on Thursday had gone off very well, and the Swiss pavilion had proved very popular, she added. But politically too, Switzerland had “got the maximum from it”.

“Now we must look and see that this partnership, which is built on firm foundations, with give and take, with transparency and criticism when necessary, continues on both sides.”

Christian Raaflaub, Beijing, swissinfo.ch (Translated from German by Julia Slater)

Leuthard in China

Doris Leuthard is in China from August 10 to 15 at the head of a top ranking economic delegation.

After visiting Chongqing, she opened the Swiss Day at the Shanghai World Expo on August 12.

On August 13 she met the Chinese president, Hu Jintao in Beijing.

On August 14 she is to open the Sino-Swiss Economic Forum.

She flies back to Switzerland on August 15.

Switzerland and China

Switzerland recognised the newly established People’s Republic of China on January 17, 1950, one of the first Western states to do so. It simultaneously withdrew recognition from the Republic of China (Taiwan).

Contacts with the People’s Republic were not initially close, owing to internal turmoil in China and the Cold War. The People’s Republic made its first appearance on the international stage when Chinese premier Zhou Enlai took part in the Indochina Conference in Geneva in 1954.

Bilateral relations between Switzerland and China have developed at a brisk pace since Deng Xiaoping launched his policy of liberalisation and reform in 1979.

There are currently 3,297 Swiss living in China. Around 300 Swiss firms with some 700 branches are active.

Since 2002 China, including Hong Kong, has been Switzerland’s most important trade partner in Asia. Swiss exports total SFr6.11 billion, Swiss imports SFr4.99 billion.

In the world as a whole, China is the third biggest exporter to Switzerland behind the EU and the US.

China is Switzerland’s fourth biggest export market after the EU, US and Japan.

China’s population of 1.33 billion is increasingly important for Swiss tourism.

Translated from German by Julia Slater