Federal Council’s economic mission to China

After a long break due to Covid, Federal Councillor Guy Parmelin, head of the Federal Department of Economic Affairs, Education and Research, resumed his economic missions to China and visited the Middle Kingdom from 1 to 5 July. A business delegation including the FH along with a scientific delegation accompanied him on this important mission. China is Switzerland’s third-largest trading partner, with bilateral trade worth CHF33 billion and it goes without saying that China and the Hong Kong Special Administrative Region are also among the most important markets for the Swiss watch industry, accounting more than 16% of Swiss watch exports for the first semester. Although this market is currently experiencing economic difficulties that are also affecting the watchmaking sector, the medium- and long-term outlook remains intact and even very positive, given that Chinese consumers traditionally have a weakness for Swiss quality products and notably timepieces.

One of the main objectives of Federal Councillor Parmelin’s mission was to modernise the free trade agreement between the two countries, which celebrates its tenth anniversary this year. This free trade agreement has substantially reduced customs duties on watchmaking products and has thus helped to promote Swiss exports to China. However, a few taxes, ranging from 4 to 8%, still remain on some watch tariff headings. The complete elimination of these customs duties is therefore also of particular interest to the industry. It is gratifying to note that Chinese government representatives are open to a revision of this agreement.

This issue was discussed with the Chinese Minister of the Economy, Wang Wentao, at the official meeting on 1 July. As part of the talks with the Chinese side, economiesuisse, Swissmem and the FH had the opportunity to raise specific sectoral issues directly with the minister. Among other things, the FH raised the issue of the protection of intellectual property (IP) and counterfeiting, which is damaging the sector and weighing on exports. The unfortunate appearance of unofficial repair centres – which look like authorised after-sales service centres for brands and thus mislead Chinese consumers about the quality of the services provided – was also noted. The Chinese Minister of Commerce offered reassurance that the protection of IP rights is also a priority for the country’s authorities and that closer collaboration with Swiss industry remains topical and even desirable.

After a short stay in Beijing, the delegation continued its tour and visited the cities of Shanghai, Shenzhen and Hong Kong, where it was able to hold further discussions with representatives of Swiss companies established in China. They acknowledged that the Chinese economy is currently experiencing turbulence, but were also optimistic about the future, particularly in view of Swiss products’ continuing popularity among Chinese consumers.

August 08, 2024