China's emerging Swiss connection

By Jeremy Garlick | chinadaily.com.cn | Updated: 2017-01-17 15:15

A Davos logo is seen before the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 15, 2017. [Photo/Agencies]

President Xi Jinping's trip to Davos for the annual meeting of the World Economic Forum also offers an opportunity to lift relations with host nation Switzerland to the next level.

In 2013, Premier Li Keqiang visited Switzerland and signed a free trade agreement (FTA), the first between a European country and China. The agreement built on Switzerland's decision to grant China market economy status as early as 2007.

The Sino-Swiss FTA has not encountered major problems since 2013, and both sides are, in fact, looking to expand cooperation. The gradual but steady progress made can demonstrate to the rest of Europe the benefits of opening up to Chinese business without fear of incurring major financial shocks.

Of course, Switzerland is not a member of the European Union, which makes establishing bilateral agreements easier than with EU member states. These are generally constrained by the regulations and bureaucracy which characterize the Brussels-based union.

The EU has thus far declined to give China market economy status, despite 15 years having elapsed since China joined the World Trade Organization. This prevents any of the current 28 members of the EU from signing free trade agreements with Beijing.

Thus, Xi's visit is building on an already-existing platform which, although it is independent of Brussels' control, has potential brush-on effects with the rest of Europe.

Premier Li's 2013 visit also laid the foundation for cooperation between the two countries in a variety of other areas, including tourism, technology, manufacturing and the environment. President Xi is going to be discussing these with representatives of the Swiss government as both sides look to sign further cooperation agreements.

Positively transforming the global economic system is one of the priorities of Davos this year. Finding new directions for innovative development is also certain to be the subject of discussion with Swiss leaders as well.

Among the initiatives to be launched during Xi's current visit is a 'Sino-Swiss Tourism Year for 2017'.

Switzerland is already one of the most popular countries for Chinese tourists visiting Europe. With the warming relations between the two nations, China is also becoming increasingly popular with Swiss tourists.

The tourism initiative is, therefore, aimed at boosting cultural ties further with a view to enhancing mutual understanding between the two peoples.

Another area in which the potential for cooperation is obvious is the financial sector. Switzerland is already a hub for China's currency, the renminbi. Although more work needs to be done to increase the volume of transactions and make the Swiss hub a success, a promising start has been made.

Switzerland's world-class banking expertise means that RMB-denominated financial services are in safe hands. With Swiss know-how, a gradual spread in the usage of China's currency through Europe is to be expected in the coming decades.

While in Geneva, President Xi is also going to visit the headquarters of the World Health Organization. This emphasizes the importance China places on developing its health care and medical capabilities.

In fact, cooperation on medical research between Swiss and Chinese scientists produced some startling and groundbreaking results in 2016.

The respected scientific journal Nature reported in November that cooperation between the Swiss Federal Institute of Technology in Lausanne and a laboratory in Beijing has led to an innovation in treating paralysis caused by spinal cord injuries.

Thus, Xi's visit to the WHO headquarters is likely to be more than merely symbolic. It is surely intended to illustrate China's intent to become a global leader in the medical research industry, with Swiss assistance and expertise playing an important role.

People-to-people exchanges between China and Switzerland in the fields of education, science and finance are on a clear upswing. Thus, there is every chance that Xi's visit will consolidate the progress made so far and lead to further cooperation in the future.

Adding new layers of reciprocity to the emerging success of the Sino-Swiss partnership, Xi's trip can send a strong signal to the rest of Europe that engaging with China is a win-win opportunity rather than a cause for concern.

Jeremy Garlick is a lecturer in international relations at the Jan Masaryk Centre for International Studies, University of Economics in Prague.