GenevaLunch | 28 January 2009
China and Switzerland: investment protection signed, free trade under study
Bern, Switzerland (GenevaLunch) — Switzerland Tuesday became the first country whose investors will receive a “higher level” of protection in China, under the terms of a bilateral agreement signed during a working visit by Chinese Premier Wen Jiabao. The two countries also agreed to set up a working group to study a free trade agreement that should go into effect “as soon as possible.”
This is the first high-level working visit by a Chinese official since President Jiang Zeming was in Bern in March 1999.
The bilateral agreement on investment, the Swiss announced, means that “Swiss investors on the Chinese market will be the first to benefit from a higher level of legal protection. Swiss direct investment in China currently amounts to almost CHF5 billion, placing Switzerland 15th on the list of China’s most important investors.” Switzerland is encouraging China to increase its direct investment in Switzerland, now “relatively modest.” The agreement replaces one from 1986 that was no longer adequate, the Swiss government says, but it provided no details on what the new level of protection includes.
The working group to study the feasibility of a free trade agreement should be set up in the second half of 2009, the two countries agreed.
The Swiss touched on a topic that is of concern to Switzerland: its role in the G20 talks. As the 21st largest economy, Switzerland is not involved directly. The government statement Tuesday noted that “The Federal Council delegation stressed during the discussions that significant progress had been made in identifying the causes of the financial crisis, and that there was a clear need to improve regulation in specific areas. Discussions on this issue primarily take place in the framework of the G-20. As one of the world’s most important financial centres, Switzerland should be involved in the discussions.”
The talks with the Chinese government Tuesday were wide-ranging, covering the economic situation against the backdrop of the current global financial crisis, political dialogue, human rights dialogue and bilateral cooperation in the fields of science and technology.