Swiss and China strengthen economic ties

Swiss and China strengthen economic ties

06 May 2019

Swiss President visited China and strengthened bilateral ties between two countries, but not without raising some controversies back in switzerland. Economic and finance matters were the focuses during the state visit.

Strengthening relations

Swiss President Ueli Mauer (holding this year presidency as a part of rotation cycle), who is also the finance ministry, visited China for a state, week-long trip, during which he personally met with the Chinese President Xi Jinping. Main talks focused around strengthening ties between two countries in terms of finance and economic matters. A declaration of intent to improve cooperation on investment, finance and trade was signed by both sides – the so-called Belt and Road Initiative. Its aim is to improve conditions and ease cooperation between enterprises from Switzerland and China in third markets. A memorandum of understanding on intensifying cooperation is supposed to follow. In a joint interview with Chinese media, Maurer stated that “Many Westerners have been concerned about China’s rapid development because it’s greater than what they expected. But they should respect China’s great achievements as only this way can the two sides have a good basis for dialogue.” According to Maurer also, globalization is the key to successful global growth.

Does China need Switzerland?

It may be easy to think of reasons why Switzerland want to co-operate closely with China – the global force in any aspect: economic, financial, fintech, trading. But what is in it for China? The Chinese apparently look for leading technology as well as modern economies, and in such fields, Switzerland has a lot to offer. Even more than other European countries, even these the richest ones. One shall bear in mind that Switzerland is the only country in the continental Europe so far to have a free-trade agreement with China. Also, matters the fact that Switzerland is not a member of the European Union or the euro zone, which means it can freely negotiate conditions of deals. Switzerland’s very good reputation on the global market makes it a country that China wants to have good relations with and to show them globally as something of a flagship product.

Lack of enthusiasm

Even though now Switzerland and China are close – almost as if they were neighboring countries having cross border workers – it was not always like that. Twenty years ago, things were very different. The fact that now it has changes and that the president of Switzerland is traveling for a state visit and showing such a great enthusiasm in having close relations with China, does not sit well with everybody. Some members of Parliament in Bern have expressed their, let’s say gently, lack of enthusiasm, for Maurer’s trip. Sibel Arslan from the Green Party stated that this economic cooperation is progressing too quickly without any specific strategy and without looking closely at human rights issues in China. The situation in China in terms of human rights is far from perfect, but Switzerland’s government seems to bother mainly for economic interest. But Elisabeth Schneider from the Christian Democratic Party commented that its because of the Chinese’s human right that visits like the one of Maurer’s matters – as some issues can be only addressed on personal meetings. However, it was not noted in any of statement or interview, if indeed president Maurer addressed such issues.

Further developments on the currency market.

The Swiss Franc is getting stedly stronger. This is tendencz that is now persisiting over the last year. Accoring to analysts from UBS euro will constinue getting stronger over the next months as tensions in the global economy and politial uncertenty make tge Swiss Frann a save haven for investors.