Switzerland has not escaped from the Europe-wide recession. But it has at least managed to alleviate some of the gloom by increasing its profile in the buoyant economies of Southeast Asia.
China, as the fastest growing market in the region, is once again a source of great attraction to Swiss exporters and investors. This is a welcome development after a decline in export levels of 35 per cent between 1986 and 1991. Only a year ago the President of the Swiss-Chinese Chamber of Commerce complained that "there are few people who realise what an interesting market China is". But since then the Swiss have clearly woken up to the opportunities. The January-June . 1993 export. figures were hailed by the local press as a tonic to the general economic malaise in Europe. 'China trade booming ? New record likely" ran one headline. Other indicators also point to an upturn: significant investments deals are in the pipeline, and membership of the Swiss-Chinese Chamber of Economic Relations has risen by a third. Founded in 1980 the chamber is a non-governmental and non-profit making association with 280 Swiss companies as their members. After a difficult period since 1989, the chamber is now enjoying improved fortunes, welcoming 70 new members already this year.
One factor which has facilitated this improvement is the excellent political relations that exist between the two countries. Switzerland was one of the first countries to extend official recognition after the foundation of the PRC in 1949. Ever since, friendly relations have been extended between the two countries ? to the great benefit of Swiss industry. Only last year China's Premier Li Peng was invited as a guest to the annual International Management Forum in Davos. During his trip he also met high ranking Swiss officials.
So far 1993 has been a quiet year in terms of official and trade missions. Since last year's visit to China by Switzerland's Federal Councillor there have been no high ranking visits between the two countries. However a more active programme is in place for the coming months. In December a Chinese government commission is due to arrive in Switzerland to discuss mixed credit and other topics. The Chinese are currently placing emphasis on their small and medium-sized companies. Three other inward delegations are also planned during the last quarter one headed by the CCPIT Shenzhen Sub-Council expected in November and the others coming from Ningbo and Nantong.
Turning to the trade figures, direct exports to China during the first half of 1993 were SFr461 m (US$323m), bettering the same period last year by 86 per cent. Machinery was the best performer with an increase of 114 per cent; instruments, another Swiss speciality, grew by 39 per cent and watches gained 16 per cent. If this improvement is maintained during the second half, the previous export record of $518m will fall
As to imports from China, the trend has been steadily upward for the past 15 years, rising from TJS$110m in 1983 to US$614m in 1992. The first half of this year showed yet another increase, growing by 18 per cent. Textiles accounted for 48 per cent, machines 11 per cent, toys 11 per cent and leather goods 7 per cent.
Although no official figures on direct Swiss investments are available, they are high when compared to the moderate size of the country and its industry. Nestle and ABB are particularly strongly-placed with several joint ventures each. Nestle reaffirmed its commitment by recently announcing plans to open a new factory each year.
The three chemicals giants Ciba Geigy, Sandoz and Roche have a long presence in China. Schindler Elevators, with two plants, appeared in the list of the top ten most successful joint ventures over the past six years. Among the well-known machinery and instrument companies, Sulzer, Bueler, Mettler and Leica all recently established joint ventures with Chinese partners. The latest ventures include SMH which launches Swatch through a chain of sales points and Bally Shoes which is planning a move into the promising Chinese market. Sandoz Nutrition signed a joint venture contract with Shanghai Coffee Factory, under which the new company Wander (Shanghai) Nutrition Ltd will produce malted beverages Ovaltine and Lavaco.
As an international financial centre, Switzerland can boast a string of prominent banks and insurance and trading companies. Societe Generale de Surveillance has a strong presence, becoming a minority equity partner in China's first Sino-foreign joint venture commercial bonded warehouse (CBW), a trade facilitation services entity based in Tianjin. The CBW offers a range of warehousing and freight forwarding services, including conswolidation, storage, marking, labelling and customs clearance. Credit Suisse leads the banks with offices in Shanghai and Beijing. Meanwhile Swiss Banking Corporation has recently opened in Shanghai and in September it became the first Swiss bank to gain a seat on the Shanghai Securities Exchange for trading B-shares. Union Bank of Switzerland maintains a branch in Beijing.
A number of medium-sized manufacturers in various industrial sectors still sell through Swiss trading companies with a long presence in China. There is a strong interest on the Chinese side for various forms of cooperation with such companies. *