Reader's Digest > 21 March - 3 April

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Reader's Digest, 21 March - 3 April

Swiss and Chinese Business Related News in Switzerland and China

BILATERAL RELATIONS

A Showcase Tower of Switzerland in Beijing
Published by laliberte.ch, 30th March 2015
Switzerland is lacking visibility in China. What is missing is a place to showcase the growing trade between China and Switzerland, a tower of 150 meters high for example. This is the project imagined by the Swiss Ambassador to China, H.E. Jean-Jacques de Dardel, and carried by Swiss investors under the consortium "Swiss Active Building Group", led by Marcel Wyler, CEO of Adaxis. Its name? The Swiss House Beijing. It must serve as the showcase of the Swiss economy and technology’s vitality in the center of the Chinese capital. "We need a place of reference that draws the attention of the Chinese" says Ambassador de Dardel. "Despite the quality of our products and our presence, we are missing profile in this huge country. We do not reach critical mass to represent something visible to the Chinese." A real handicap in the year of the 65th Anniversary of diplomatic relations between the two countries and with the Free Trade Agreement entered into force in July 2014. With a surface area of at least 30’000 m2, the tower will primarily house offices but also conference rooms, reception and exhibition as well as hotel apartments. This private project with a CHF 240 million budget will also provide benefits such as the presence of lawyers, translators and tour operators.

Switzerland to Participate in Foundation Process of Asian Infrastructure Investment Bank
Published by wbf.admin.ch, 20th March 2015
The Federal Council has decided that Switzerland will participate in the foundation process of Asian Infrastructure Investment Bank (AIIB), which is to promote sustainable economic development in Asia. Switzerland is one of the first countries in Western Europe to take this step. It can thus be involved in the preparation of this important new financial institution's articles of agreement. Moreover, it will enable Switzerland to be well positioned in the new institution from the outset. Finally, this move will help to strengthen relations with China and with Asia in general. The purpose of AIIB is to promote sustainable economic development in Asia, concentrating on the region's poorer countries. The focus is on providing financing for energy, transport and telecommunications infrastructure, urban and rural development and the environment. The bank will have an authorized capital of USD 100 billion. It will provide support by granting loans, investing in equity or providing guarantees. The new institution will work closely together with the existing multilateral development banks and complement their activities.
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BUSINESS NEWS

Shanghai Airport Authority and Euroairport Sign a Joint Letter of Intent to Promote Aviation Business between the two Sites
Published by sim.biz, 26th March 2015
On the occasion of a visit by EuroAirport's Management to Shanghai on 13 March 2015, EuroAirport and Shanghai Airport Authority signed a joint letter of intent (LOI). The LOI states the following common aims: to strengthen cooperation between the two airports authorities to promote a direct cargo flight or passenger flight between EuroAirport and Shanghai Pudong International Airport and to organize exchange programs focusing on aviation. A direct cargo flight between EuroAirport and Shanghai Pudong International Airport would facilitate air freight traffic with China, improve mobility between the two sites and promote business relations. The logistics and the pharmaceutical industry are key drivers of the economy at both sites, creating added value in social terms in the form of jobs. The LOI confirms once again the attractiveness of EuroAirport's location close to Basel, home to some of the world's leading pharmaceutical companies, as well as the market relevance of the new Cargo Terminal, which went into operation at the end of January 2015.

Hong Kong May See Downturn this Year
Published by China Daily, 24th March 2015
Report warns SAR too reliant on 'skewed economy' as tourists skip city. Hong Kong will suffer an economic downturn this year as the city's "unbalanced, troubled and hollowed-out economy" will be heavily susceptible to a structural decline in the number of mainland tourists, analysts have warned. They say it will probably take years to reform such a skewed economic structure. In the past 10 years, the economic picture has made the city ever more dependent on the financial sector and mainland inbound tourism for economic growth, according to Swiss investment bank Credit Suisse's latest strategy report. The report compared Hong Kong to the economies in Beijing, Shanghai, Singapore and Switzerland, noting that manufacturing and utilities only accounted for 3.5% of gross domestic product (GDP), the lowest among those studied.
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CULTURE & SOCIETY

Chinese Ethnic Group Performances in Switzerland
Published by China Daily, 31st March 2015
The town of Sarnen, Switzerland got a special taste of traditional performances from China's Guizhou province, on 28 March, to celebrate the 65th anniversary of Sino-Swiss relations, when the provincial tourism administration put on a "Colorful Guizhou -- Mysterious Ecological Land of Beauty" which attracted more than 300 people to the town square increasing interaction between the two countries. One part of the performance was Wind of Colorful Guizhou, which had Guizhou folk songs and dances to show the customs of the Miao, Bouyei, Dong, Yi, Gelao and Shui ethnic groups and which drew a lot of praise from the Swiss who even asked to have more information on the province. There was also a photo exhibition entitled "Beauty of Guizhou" with 40 photos of its nature and ethnic culture.

East Meets West - Building Bridges: Release of the Official Tour Plan
Published by 2dancelu.ch, 31st March 2015
The Swiss culture exchange project “East meets West - Building Bridges” by Sonja Rösli is happy to release the official tour plan for China in April 2015. Sonja Rösli will be accompanied by Superhorn Walti Sigrist, drEidgenoss and the manager of the tour Tobias Schmidt. They will perform in the superior Hotel Crowne Plaza Beijing Sun Palace during their Swiss Week from 13 to 17 April and give a Swiss Folklore concert at the SOHO 3Q, Beijing at 18 April. In between they are heading to Qingdao to be part of several shows at the great opening ceremony of the new Swissmooh shop at Marina City mall from 10 to 12 April. Their aim is to gather support and sponsors for the workshops at public schools in Yongzhou, Hunan from 19 to 27 April. They will take the local people to a fantastic trip through Switzerland with his fascinating culture and traditions, to widen their horizon and bring the world closer together.

Building a Human Brain
Published by swissnexchinanews.org, 27th March 2015
swissnex China had the pleasure to welcome two experts in the field of neuroscience, to share with us their knowledge about the human brain and the progress of human brain projects in Switzerland and China. Dr. Sean Hill - co-Director of the Blue Brain Project and co-Director of Neuroinformatics in the European Union funded Human Brain Project (HBP) at EPFL - presented the possibilities, challenges and current status of these projects in Switzerland, while Prof. Feng Jianfeng - distinguished Professor in the Thousand Talents Program of China, Chair Professor in Applied Mathematics at Shanghai Center for Mathematical Sciences, Professor of Biology, Mathematics, and Brain Science in Fudan University, China, and Professor of Computer Science in University of Warwick, UK - presented them from the Chinese point of view. The speakers were friendly and eager to share their knowledge with an entertaining presentation that was suitable to both amateurs and specialists.

Swiss Orchestra Celebrates Chinese Composer's Work
Published by China Daily, 23rd March 2015
The Basel Symphony Orchestra of Switzerland will tour China with two concerts in Beijing and Shanghai this week. Under the baton of its chief conductor Dennis Russell Davies, the orchestra will perform Mozart, Beethoven and Stravinsky classics plus Chinese composer Chen Yi's Ge Xu Antiphony. In an e-mail interview, the US-based Chen said, the US conductor Davies had supported her throughout her professional career. He was the first foreign conductor to commission her to write a piano concerto, when he was the music director of the Brooklyn Philharmonic Orchestra in New York.
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GENERAL INTEREST

Solar Impulse Lands in China with Messages of Clean Energy and Sustainability
Published by SinOptic, 31st March 2015
Solar Impulse 2, a Swiss solar airplane which endeavors to circle the globe, touches down in Chongqing, China on Tuesday 31 March, carrying the messages of Swiss innovation, clean energy and sustainability. The airplane left Mandalay, Myanmar for its fifth leg of its epic circumnavigation early Monday morning with pilot Bertrand Piccard in command. The single-seater plane landed at the Chongqing Jiangbei International Airport at 1:35 am, about 20 hours later, covering 1,375 kilometers. Mr. Jean-Jacques de Dardel, Ambassador of Switzerland to the People’s Republic of China, welcomed the plane on the apron with Mr. Ai Yang, Deputy Secretary General of Chongqing Municipal Government. Referring the venture as a “gift of Switzerland to our common future,” the ambassador spoke highly of the pioneering spirit and innovative ideas Swiss pilots and co-founders Bertrand Piccard and André Borschberg have demonstrated with their team to the world since they embarked on the journey earlier this month.

Solar-Powered Airplane in Chongqing Thrills Students
Published by China Daily, 31st March 2015
About 1,600 young Chinese students stood, applauded and cheered as two Swiss pilots entered a school hall in Chongqing on Tuesday afternoon. Early in the morning, pilot Bertrand Piccard had landed the Solar Impulse 2, the world's first solar-powered plane, at Chongqing Jiangbei International Airport after completing the fifth leg of an attempt to fly the Swiss-developed aircraft around the world powered only by the sun. He is making the flight with fellow pilot Andre Borschberg. The pair is taking turns to fly the single-seater aircraft - which is made from carbon fiber and has 17,248 solar cells built into its wing - 35,000 km over 12 legs, including across the Atlantic and Pacific oceans. The journey back to Abu Dhabi, from where the journey began on 9 March, is scheduled to take five months.
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INDUSTRIES

Engineering / Manufacturing

DKSH Promotes Key Clients’ Brands at Food Ingredient China 2015
Published by dksh.com.cn, 1st April 2015
DKSH Business Unit Performance Materials, a leading Market Expansion Services provider for specialty chemicals and food ingredients, exhibits together with Wacker, Ceamsa, Eurovanille, OmniActive, Horphag, Oleon, Polygal and The Wright Group at the FIC, the largest professional food additives and food ingredients exhibition held in Shanghai from April 1 to April 3, 2015. Senior executives of each company will be present and provide detailed information on their product concepts. The showcased product portfolios include curcumin and cyclodextrin-based products from Wacker, natural vanilla products from Eurovanille, lutein and high potency ginger from OmniActive and Pycnogenol® from Horphag. “We are delighted to partner with renowned nutritional health food and dietary supplement manufacturers and support them with our Market Expansion Services to launch and establish more of their products in China,” commented Kevin Bee, Acting General Manager, Business Unit Performance Materials, China and Hong Kong.

DKSH Transfers two China Pharma Brands to CMS
Published by dksh.com.cn, 26th March 2015
DKSH and China Medical System Holdings Limited (CMS), a leading pharmaceutical services provider, have today signed an agreement for the transfer of Combizym and Hirudoid, two pharmaceutical brands owned and marketed by DKSH in China. Combizym’s current market presence is almost uniquely focused on China and therefore the entire business will be handed over to CMS. Hirudoid is today marketed and distributed by DKSH on a regional basis. Here, the transaction solely comprises the purchase of Hirudoid products in mainland China. DKSH will continue to expand the brand outside of China and to source the products for the Chinese market. The Chinese pharmaceutical market is one of the world’s biggest, yet highly fragmented and competitive. The transaction allows DKSH to consistently implement its China strategy for sustainable, profitable growth as a Market Expansion Services provider in selective niches.

Enterprises Reach Overseas for Expansion
Published by China Daily, 26th March 2015
The coastal city Dalian in Liaoning province has made great strides in helping its enterprises tap overseas markets, according to an official with the city government. By October last year, Dalian enterprises had completed 99 overseas acquisitions with a total investment of USD 995 million, said Li Yunsheng, deputy director of the city's economy and information technology commission. The nation's "going out" strategy has encouraged more Dalian enterprises to participate in international competition and improve their strength through integrating their resources, Li said. In 2014, Dalian TDC Cutting Tools Inc acquired Manigley AG, a Swiss tool producer founded in 1918. "The acquisition will increase our annual sales by RMB 350 million (USD 56 million) and narrow our technology gap with advanced producers in the world," said Qi Shumin, chairman of TDC. Since it was founded 20 years ago, TDC has developed into one of the top global producers of cutting tools.
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Bank / Finance / Insurance

Fiscal Woes, Debt Overhang but no Crash
Published by China Daily, 27th March 2015
Economist sees a difficult transition, but thinks country will dodge bullet of financial crisis. "I think it is one of those difficult periods of transition that China is going through, principally because of the fallout and slowdown in real estate and also what is happening to land prices, which comprise about 25% to 30% of local government revenues," he says. Magnus, senior independent economist at the Swiss bank UBS, says the problem is compounded by the fact a new source of local government funding, the issuance of bonds, is unlikely to be up and running for up to a year. He estimates the decline in real estate prices combined with the lag before the introduction of bonds could lead to a RMB 1.5 trillion (USD 240 billion; EUR 210 billion) loss of revenue, equivalent to 1.6% of GDP.
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Hospitality / Tourism / Retails

CHIC Fashion Exhibition Shanghai 2015
Published by 5starplusdesign.com, 31st March 2015
Taking place in Shanghai for the first time, CHIC International Fashion Fair attracted hundreds of exhibiting brands and thousands of visitors. For those who did not visit the exhibition, the link provides a summary of 5starplusdesign’s key observations. Chinese brands are learning fast and are committed to develop commercially successful, branded businesses. If foreign fashion companies want to take a foothold in this exciting market, they need to first research and understand the country, the various geographic areas and diverging consumer characteristics, and the dynamics of the local retail market. Then, a strategy with achievable milestones and measurable targets needs to be defined to facilitate the establishment of a successful business in China.
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Legal / Trade / Consulting / Services

How your Brand Can Benefit from ‘Swissness’ Lawfully
Published by vischer.com, 31st March 2015
What Chinese Investors should know? Swiss products and services enjoy an excellent reputation, both domestically and abroad. Exclusivity, high quality, precision, reliability, efficiency, luxury, high-tech and innovation are some of the distinctive features associated with products made in Switzerland. In the late 1990s, “Swissness”, a pseudo-Anglicism, started to emerge as a term to refer to the combination of positive values immanent in Swiss products and services. Worldwide, such values ultimately influence the affluent buyer’s decision, so “Swissness” is gaining economic value continuously, according to St. Gallen University’s traditional Swissness study. Today, products with a Swiss label can generally justify a mark-up of about 20% and, in the case of luxury goods, up to 50%. But the success of the Swiss brand also has its downside. The marketing concept of Swissness equally appeals to free riders or copycats, which has resulted in an increase in the “Swiss made” designation being abused both at home and abroad.

Further Scrutiny on Intra-Group Outbound Payments under Way
Published by pwccn.com, 20th March 2015
On 18 March, 2015, the State Administration of Taxation (SAT) released the Public Notice Regarding Certain Corporate Income Tax Matters on Outbound Payments to Overseas Related Parties (hereinafter referred to as the “Public Notice 16”) as well as its official Interpretation (hereinafter referred to as the “SAT’s Interpretation”). Public Notice 16, together with the SAT’s Interpretation, further set out SAT’s position from a transfer pricing perspective in relation to the outbound payments. Compared to Circular 146, Public Notice 16 deals with all types of outbound payments to overseas related parties, rather than focusing on outbound service fee and royalty fee payments. Public Notice 16 reiterates that outbound payments to overseas related parties should follow the arm's length principle, and more importantly, specifies four types of payments that should not be deductible for corporate income tax (CIT) purpose. It is considered that Public Notice 16 is SAT’s another important enforcement in response to the action plan on base erosion and profit shifting (BEPS).
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