Swiss business promoters think they have spotted a new opportunity – instead of doing business in China, encourage the Chinese to relocate to Switzerland.This content was published on December 15, 2004 - 18:31
The State Secretariat for Economic Affairs (Seco) has teamed up with 14 cantons to launch a joint programme aimed at promoting Switzerland as a major investment location for Chinese businessmen in Europe.
It says the programme – which has an initial promotional budget of SFr250,000 ($219,000) – is intended to be a “trailblazer” for future Swiss marketing activities abroad.
The initiative was launched just a few days after Chinese IT firm Lenovo shook up the international business world by acquiring the personal computer unit of IBM – the inventor of the PC.
The headline-grabbing takeover – which leaves Lenovo as the world number three behind Dell and Hewlett-Packard – highlights the growing trend for big Chinese firms to expand abroad, often with strong government backing.
More than mountains
“China has become a major global player,” project manager Marco Rhyner of federal economic promotion organisation “Location Switzerland” – part of Seco – told swissinfo.
“We think the time is now right to start promoting Switzerland as a location within China. We see huge market potential and we cannot just wait until companies are ready to expand abroad before contacting them.
“We have to start establishing relationships now, because nobody in China knows Switzerland at the moment except as a tourist destination.”
Rhyner says the project organisers are pursuing a two-track promotional strategy. They are aiming to attract Chinese companies to set up regional headquarters in Switzerland.
And they want to attract rich Chinese individuals and/or entrepreneurs to set up shop here.
The primary corporate targets are large firms with “global” products that they wish to sell in Europe, but which have not yet established full-scale distribution and sales structures abroad.
Promoters will highlight the fact that Switzerland is already the number one choice for multinationals locating in or relocating to Europe.
Key selling arguments here include Switzerland’s central location, highly qualified workforce and “competitive” corporate taxation system.
Rhyner says it is too early to name specific target companies, or even sectors, but agrees that the Lenovo-IBM deal – and the Chinese IT sector in general – offer a “classic example” of the sort of opportunity the promoters are now looking for.
He says there are currently about 50 to 100 potential targets in the sector and Swiss promoters and businessmen have already begun talking to “several of them”.
Analysts point out that large Chinese firms with global ambitions include PetroChina and Baosteel (oil and steel, who both seek access to raw materials), telecoms firm Hauwei and white goods producer Haier (which are both trying to build global brands).
Many Chinese companies are actively supported in their international ambitions by the government. They also face pressure to expand abroad from intense domestic competition and structural over-capacity as the Chinese economic boom shows signs of slowing.
Regarding potential investors, Rhyner says: “We know from our contacts that there is quite a big group of Chinese entrepreneurs with substantial financial means, who say they would like to be more independent of China.
“In many cases, this is because they are not sure what will happen politically in the next few years and want to broaden their options.”
The pilot project aims to “bundle strengths and use synergies” and Seco hopes that all 26 Swiss cantons will eventually join.
It is the latest indication that Swiss economic promotion policy, which traditionally operates on a competitive canton-specific model, is moving towards a more integrated approach.
Rhyner points out that it is “very difficult” for investors in China – and elsewhere – to “understand the differences” between individual cantons in such a small country.
Several French-speaking cantons have now joined together to promote the region as a whole via the Development Economic Western Switzerland (DEWS) body and the Greater Zurich area, representing six cantons, is pursuing a similar strategy.
The pilot project – the second of its kind, following the launch of a similar project aimed at Japan a few years ago – will be funded primarily by the cantons, with the federal government providing about SFr100,000.
swissinfo, Chris Lewis
China is Switzerland’s second-largest trade partner in Asia and Switzerland ranks 15th in terms of direct investment in China (SFr5 billion).
It has a population of some 1.3 billion and a 2005 economic growth target of eight per cent.
Chinese investment in Switzerland is minimal and tourism only began to take off this year following a new agreement.
The federal government has joined forces with 14 cantons to promote Switzerland to Chinese companies and investors.
The SFr250 000 pilot project is intended to be a “trailblazer” for future Swiss economic promotion projects abroad.
Organisers say initial talks have already been held with some potential clients, but are not yet naming any names.
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