Trade deal with China will pay dividends, says Ammann

Ammann met the Chinese Prime Minster Li Keqiang Keystone

Around 90,000 transactions have been carried out since the free trade agreement between Switzerland and China was signed, says Swiss president and economics minister Johann Schneider-Ammann, speaking with swissinfo during his three-day trip to China.

swissinfo.ch: Previously you were President of Swissmem and Vice President of Economiesuisse. What do you see as the biggest challenges facing Swiss companies doing business with China?

Johann Schneider-Ammann: Not only that, but I was in business myself, and active in this market. What was and is essential is the fact that it’s a foreign culture with completely different languages. Basic trust can be established, and on that you can build a business. But that requires time.

You have to spend time together; you have to develop shared experiences. Good ones, primarily, but also maybe a few bad ones. And then the bricks for a long-term relationship have been laid.

swissinfo.ch: The biggest competitors for Swiss companies in China are the Germans. How does the Swiss government offer support for Swiss companies doing business with China?

J.S.-A.: The Swiss government is responsible for developing a framework, and for developing a free-trade agreement. We’ve done that. We also have a lot of other agreements with China. Everything else is up to private businesses.

swissinfo.ch: To what extent does the free-trade agreement help the Swiss economy?

J.S.-A.: The free-trade agreement has produced good results. Around 90,000 transactions were carried out. That means 90,000 times we had experience with filling out forms, with customs. That’s a lot of know-how.

And it’s a fact that the watch industry paid CHF27 million ($28 million) less in customs in the first year. That’s a substantial amount of money for the watch industry, and it shows that progress is being made through free trade.

All in all, the growth in our trade with China was above average in comparison to our trade with other countries where we don’t have preferential agreements, even in the difficult months we’ve had recently.  

China push

Swiss President Johann Schneider-Ammann met the Chinese Prime Minster Li Keqiang on Thursday. The countries plan to work closely together, especially in the area of innovation. 

A main theme of the meeting was the free-trade agreement in effect since mid-2014 between the countries. “I stressed that the agreement has developed very positively,” said Schneider-Ammann. He also mentioned that in a few places, grains of sand are stuck in the gears, and adjustments are needed.  

The free-trade agreement has been criticised recently by Swiss firms in China due to what they considered to be its impracticality. But Ambassador Christian Etter from the State Secretariat for Business, SECO, described the cooperation between the authorities as good. 

Schneider-Ammann also paid a visit to the China Construction Bank (CCB), one of the biggest in the country. In January 2016 the CCB was the first Chinese bank to open a branch in Zurich.   

On the program are further meetings with a variety of ministers as well as with Swiss business representatives and companies in Shanghai. Topics such as sustainability and human rights will be discussed at the highest level.