Reader's Digest > 16 - 29 January 2016

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Reader's Digest, 30 January  - 19 February

Swiss and Chinese Business Related News in Switzerland and China


GAO Yanping Became the New Consul General of RPC in Zurich
Published by, 25th January 2016
Ms. GAO Yanping replaced Ms. MAO Jingqiu and became the new consul general of PRC in Zurich. Ms. GAO Yanping was born in Nanjing, China. She received her Bachelor of Arts degree in 1982, Master of Laws degree in 1985 and Doctor of Laws degree in 1997. She joined the Foreign Ministry of the People's Republic of China in 1985 and served hereafter as Attaché, Third Secretary, Deputy Director, Director and Counselor. She was assigned as political Counselor in the Embassy of the People's Republic of China to the United States from early 2000 to late 2003. Then she worked in the Central Office of Foreign Affairs of the People's Republic of China as Deputy Director-General, Director-General from 2004 to 2009. She took her office of the Consul General of the People's Republic of China in Houston in 2009. She was Ambassador of the People's Republic of China to the State of Israel from 2011 to 2015. She is married with a daughter. She was appointed the Consul General of China in Zurich and for the Principality of Liechtenstein in December 2015.
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What Could the Chinese Year of The Fire Monkey Bring to Switzerland?
Published by, 10th February 2016
Every year in the Chinese lunar calendar is associated with one of 12 animals combined with one of five elements: metal (gold), earth, water, wood or fire. This year is the year of the fire monkey and celebrations to mark the new year take place on 8 February 2016. Fire monkeys have large personalities but are prone to irritability. Smart, courageous, ambitious, adventurous but unpredictable. The last such year was in 1956. What could the fire monkey bring to Switzerland? Recent drama in the Chinese stock market could have some wondering how a fire monkey might add to the excitement. As a share of world market capitalisation, the Chinese stock market is relatively small. On the other hand China’s share of global GDP is large. Second only to the US, China accounted for more than 13% of global output in 2014. So what happens to the Chinese economy matters and has an impact on global investors, including those based in Switzerland. Trade between Switzerland and China is significant and growing. In 2014 China was Switzerland’s fifth largest trade partner (4th for imports, 6th for exports). Switzerland is the only continental European country to have a free trade agreement with China. If approved by regulators, the USD 43 billion tie-up of ChemChina and Syngenta could bring deeper business relations with China and Switzerland over the coming year. One Chinese astrologist advises that to get good return on your investments this year you will need to outsmart the monkey.

Sigg Bottle Acquired by Chinese Manufacturer
Published by, 9th February 2016
US private equity firm Riverside Company, owner of Sigg Switzerland AG since November 2003, sold the traditional drinking bottle company to Chinese Zhejiang Haers Vacuum Containers Co. Ltd. The Chinese stainless steel vacuum bottle, food container and vacuum flask producer Haers pays CHF 16.1 million (EUR 14.6 million) for Sigg Switzerland AG, reports Froriep, the Swiss law firm who carried out the legal due diligence review and acted as Swiss transaction counsel to Zhejiang Haers Vacuum Containers Co. Ltd. The transaction forms were signed on 3 February and the entire transaction should be finalized by the end of February. The 65 employees of the more than 100 years old Swiss company Sigg were informed about the takeover only shortly before the news was made public. Sigg was still producing a major part of its legendary aluminium drinking bottles in Frauenfeld. According to Sigg CEO Stefan Ludewig, “The new owner will maintain the production in Switzerland. With the Sigg takeover Haers wants to become an internationally recognized drinking bottle producer. This acquisition offers us nothing but chances.”

Swiss Managers in China Remain Confident
Published by, 5th February 2016
Despite a strong Swiss Franc and slowing GDP growth, Swiss managers in China remain confident: 58% expect “higher” or “substantially higher” sales in 2016 compared to 2015. Only 7% expect lower sales. Profit expectations are very positive, too. 57% of Swiss companies plan to invest more in China, 5% want to decrease investments, according to a recent survey among 101 decision makers of Swiss enterprises.  This is the result of the “2016 Swiss Business in China Survey” by the China Europe International Business School (CEIBS, the premier business school in Asia), the Swiss Center Shanghai (SCS), the Swiss Embassy in China, Swissnex, SwissCham, Switzerland Global Enterprise and China Integrated. The comprehensive survey comprises responses from 101 Swiss enterprises, from small and middle-sized companies to big players. The survey is believed to be representative of the approximately 600 Swiss companies that have established operations in China

Investors Shouldn’t Shun China, Says Swiss Fund Body
Published by, 4th February 2016
The Chinese market corrections seen over the start of 2016 do not mean investors should run scared from the emerging market nation, according to leading fund selectors in Switzerland. That was the consensus view of selectors, strategies and investors polled during the most recent quarterly meeting of the Investment Strategist Association of Geneva. When asked whether they would now look to completely avoid China, members of the group were resolute, with 73% stating it was not the time to remove capital. This compares with 18% who believe it would be a smart move to shed exposure in the wake of the market suspensions and difficulties seen over the course of January. Nine per cent were undecided.

E-Commerce Boosted the Number of Packages from China
Published by, 2nd February 2016
In 2015, the Swiss Post sent two and half million parcels from China. This growth, which should continue, is due to orders on Chinese e-commerce websites. These small parcels are essentially cheap electronic gadgets that Swiss people purchased on e-commerce platform such as Alibaba. But these parcels are not free meals. "[…] because there are international agreements that are negotiated between national positions. These contracts fix the remuneration and the money we earn from China by individual parcel does not cover the cost on the Swiss side." says Swiss Post’s spokeperson Bernhard Burki. This means that the amount China transfers to Switzerland for each parcel, around CHF 2-3, are simply insufficient. The reason is because of the status attributed to each country: Switzerland is put in the category of industrialized countries. China is however considered as an emerging country and therefore benefits from preferential rates on these interpostal remuneration. Bern intends to renegotiate the status of Beijing during the next meeting of international posts planned in the autumn.

Pharma Weighs on Swiss Stock Market
Published by, 30th January 2016
The SMI is set to end the week modestly lower along with global stocks after earnings reports from pharmaceuticals heavyweights Roche and Novartis fell short of analyst’s estimates. Global markets experienced another volatile week amid ongoing speculation over whether central banks will come to the rescue of turbulent financial markets. The slowdown in China and central remained central to investor sentiment this week. Chinese stocks lost further ground after data showed that capital outflows from the mainland reached a record USD 1 trillion in 2015, more than seven times more than the whole of 2014. In company news, Swiss pharmaceuticals made headlines this week after Roche Holding AG, Europe’s largest drug maker, reported that full year profits missed analyst estimates. The company blamed the strong Swiss franc and higher taxes for the disappointing performance. Novartis AG, Europe’s second-largest drug maker, also disappointed as its Alcon eye-care unit continued to plummet and the strength of the US dollar eroded the value of global sales.

Caution Required when Dealing with Unexpected Requests
Published by, 24th January 2016
Recently, there have again been multiple reports of Swiss companies receiving fraudulent enquiries from alleged prospective customers in China. Caution is advised, especially if you receive unexpected delivery requests from unknown Chinese companies. Typically, these enquiries involve larger orders, for which a deposit of 30% to 40% is offered, and a letter of credit* for the remainder of the order. The supplier is asked to travel to China to sign the contract. In most cases, a contract is actually concluded in China. However, the European parties to the contract are then asked by the purchasers to seal the conclusion of the contract with an expensive meal or valuable gifts. Once these requirements have been met, the Chinese purchasers suddenly break off all contact. The purchasers, which are generally bogus companies, cannot be traced. The contract cannot be implemented. Any services already provided are not paid for. It is not advisable to travel to China to sign a contract. Instead, suggest that the prospective Chinese customers come to Europe and that the travel expenses incurred could be reimbursed with the first payment made as part of the order. If you receive no response to this offer, you can be fairly certain that the Chinese customer is not seriously interested in purchasing your products or services.
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Swiss Collector to Display Chinese Art
Published by, 2nd February 2016
Swiss collector Uli Sigg will hold his largest display of contemporary Chinese art in Bern, Deng Zhangyu reports. With the world's largest known collection of contemporary Chinese art in his possession, Swiss collector Uli Sigg is ready to hold his second comprehensive show since 2005, offering Western audiences an insight into China's art scene over the last decade. Sigg has collected more than 2,200 pieces of Chinese art. The new show, Chinese Whispers, will be held from 19 February to 19 June at the Museum of Fine Arts Bern, the oldest art museum in Switzerland, and the Paul Klee art center, also in Bern. It will display 150 works of 71 Chinese contemporary artists from Sigg's collection. 60% of this art was bequeathed four years ago to M+ Museum, an art museum that will open in Hong Kong in 2019. Although Sigg has held several shows in the West on contemporary Chinese art, with particular focus on topics like shanshui (landscape ink painting), calligraphy, Cantonese artists and the artists of Shanghai, the new show in Bern is expected to be the largest ever display of his art holdings to date.

Chinese Painting at Davos
Published by China Daily, 30th January 2016
A Chinese painter from Tianjin sent his landscape to the 2016 World Economic Forum in Davos, Switzerland as a special gift from the “Tianjin Night” activity on 21 January. Li Xufei, who teaches at the Tianjin Academy of Fine Arts, created the Chinese landscape “Autumn”. The work was sent to the world economic gathering as a gift. Klaus Schwab, President of the World Economic Forum, was happy to receive the gift. Li also drew a Chinese golden monkey with the character Fu, or “good luck”, during the activity and sent it to the guests attending the event. The Chinese lunar calendar assigns an animal to each year in a 12-year cycle and the year 2016 is the Year of the Monkey.
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China Rolls out 144-Hour Visa-Free Policy
Published by, 3rd February 2016
Citizens of Switzerland and of 50 other countries will be permitted visa free entry into China for short term stays of not more than six days, the Chinese State Public Security Ministry announced. Shanghai, Nanjing and Hangzhou have become the first cities in China to implement a 144-hour visa-free policy. The policy allows foreign visitors to arrive and depart from any of these three cities via airports, cruise terminals and train stations without a visa, providing their overall stay is within the six-day limit. Bai Shaokang, deputy mayor of Shanghai confirmed in a press conference in December 2015 that the 144-hour visa-free programme had been approved by the State Council and would be implemented, with the new policy coming into effect on January 30, 2016. The relaxation on travel restrictions is an upgrade of the current policy that allows passport holders from 51 countries to transit through several Chinese cities for up to 72 hours without a visa. These cities are Beijing, Guangzhou, Chengdu, Chongqing, Harbin, Shenyang, Dalian, Xian, Guilin, Kunming, Wuhan, Xiamen, Tianjin, and Qingdao.

Swiss Inventor Breathes Life into China's Startup Boom
Published by, 4th February 2016
Air pollution in Beijing and neighboring regions is not only fueling air purifier sales, but driving people to seek more information about air quality. "Laser Egg", a device about the size of an orange, measures indoor air quality and was sold out overnight during Beijing's red smog alert in December. For its Swiss inventor Liam Bates, 27, the original decision to make such a device was only to solve a personal need. In 2014, when his new wife Jessica came to China, her asthma recurred. After affirming that the air pollution was the cause, Bates began his quest to find a solution. He tested more than 20 kinds of air purifiers he borrowed from friends, but could not decide which was most effective, so made up his mind to make one himself. He started Origins Technology in early 2014 and released an air purifier later that year, which was only the first step toward the Laser Egg and unexpectedly cutting into a niche market that few before him had noticed.
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Engineering / Manufacturing

ABB Shifts Focus in China as Demand Slumps
Published by, 4th February 2016
Swiss engineer ABB is responding to sluggish demand in China by expanding in the country's western cities and focusing on sales of robotics and high-voltage power equipment, while cutting costs across the group. A cost-cutting program meant to trim ABB's expenses by some USD 1 billion annually from 2017 is ahead of schedule "in some areas," CEO Ulrich Spiesshofer said on Wednesday when the company announced fourth quarter net profit fell 70%. ABB will press ahead with the program as low oil prices squeeze sales to energy customers. The Chinese government is also scaling back infrastructure projects, lowering demand for ABB's standard products like motors and drives. Rival General Electric (GE.N) is also having to cut costs as low oil prices and slow growth hurt earnings. The challenge now, Spiesshofer said, is redirecting ABB's resources toward untapped areas such as cities in China's west where he is seeking more partnerships with local companies.

Swiss Welcome Takeover of Syngenta as Ties with China Deepen
Published by, 4th February 2016
Switzerland is welcoming ChemChina’s USD 43 billion takeover of Syngenta SA, the Alpine nation’s biggest-ever deal, with open arms. The only continental European country to strike a free-trade agreement with China, Switzerland has long been an attractive hunting ground for companies from the Asian giant. Unlike the U.S., which has blocked Chinese deals and where the ChemChina’s Syngenta purchase may face regulatory hurdles, the Helvetian nation has seen a slew of Chinese buyers of Swiss companies in the last five years -- from HNA buying airport services company Swissport to Baoshida taking over Swissmetal. In the latest all-cash purchase, state-backed ChemChina, or China National Chemical Corp., won the Swiss over by pledging to keep Syngenta headquarters in Switzerland, a sticking point in discussions with previous suitor Monsanto Co., which eventually walked away from a deal last year. While ChemChina may face headwinds in North America, where Syngenta generated $3.6 billion in sales last year and has two units, the Swiss are supporting the transaction. “The buyer is a rock-solid, well-positioned company, so this is a good deal,” Swiss Economy Minister Johann Schneider-Ammann said on Wednesday.

The Future Looks Really Bright for Syngenta
Published by, 3rd February 2016
After Syngenta’s repurchase agreement by the Chinese giant ChemChina, the chairman of the Basel group of agrochemicals Michel Demare said in an interview with RTS that Switzerland has everything to gain. Interviewed on the show Forum, Michel Demare did not hide his relief. But the group's boss said he is mostly "pretty excited for the future", facing the solution. He recalled that the group will remain based in Basel "as a Swiss company," and that employees "do not have to worry about their job, because it is a growth transaction, no cost savings." Basel City would have preferred Syngenta to remain independent. But the acquisition by ChemChina seems like a better solution than the alternative Monsanto, said the State Councilor Christoph Brutschin to RTS. The president of the Swiss Confederation Johann Schneider-Ammann reacted to repurchase Syngenta, saying himself that he is optimistic about the future of the company. He nevertheless concedes that Switzerland cannot have guarantees in terms of jobs. The Syngenta purchase offer by ChemChina announced Wednesday has just pushed the share price of agrochemical group Basel on the Swiss Exchange. Thirty minutes after the market opened, the company’s shares went up 6.5% reaching CHF 417.80.

Chinese Vice President Li Yuanchao visits ABB’s GIS Plant in Switzerland
Published by, 23rd January 2016
Li Yuanchao, Vice President of the People’s Republic of China visited ABB’s Zurich plant for high-voltage power products on 20 January, during his travel to the 46th World Economic Forum Annual Meeting in Davos-Klosters, Switzerland. Li’s visit to ABB was companied by Peter Voser, Chairman of the Board of Directors, ABB Ltd, Claudio Facchin, President of Power Grids division and Member of the Group Executive Committee of ABB Ltd, and Dr. Chunyuan Gu, Senior Vice President of ABB Group, Chairman and President of ABB (China) Limited. During the visit, they exchanged in-depth ideas on how to drive the Fourth Industrial Revolution by innovative power and automation solutions. ABB is headquartered in Zurich, Switzerland. The ABB plant visited by Li is dedicated to manufacturing ABB’s most advanced high-voltage power products including generator circuit-breakers and GIS (gas insulated switchgear).
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Bank / Finance / Insurance

China the Elephant in The Room: Julius Baer CEO
Published by, 1st February 2016
Investor nerves over emerging markets and China – the "elephant in the room" – are resulting 25-30% holdings in cash at Swiss bank Julius Baer, the chief executive told CNBC Monday. CEO Boris Collardi said investors were looking to reduce their exposure to emerging market volatility such as that seen in China since the start of the year, with investors increasingly nervous that the world's second-largest economy could be heading for a "hard landing" as growth slows. "If you look at China, the elephant in the room in the last 12 months, we've had a lot of volatility and that makes people nervous," he told CNBC Europe's "Squawk Box." "There is a little bit more caution on the side of investors and at the same time we're looking at them trying to diversify their emerging market concentration...I would say they've been cautious on leverage, some of them have deleveraged a bit but broadly we're still continuing to see people active in the market. But I think our reading is perhaps a bit more pessimistic than what it is on the ground." He added that the bank was holding "double-digit number in cash."
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Hospitality / Tourism / Retails

Worried about Sales Slump in China and Hong Kong, Swiss Watch Industry Bring in the Stars in Annual Show
Published by, 28th January 2016
It was a rough 2015 for the luxury Swiss watch industry. Sales in Hong Kong and China, two of its three biggest markets, fell significantly, dragging down global growth figures into negative territory. Most of the damage happened in Hong Kong, the world’s largest export market for Swiss watches. According to figures from the Federation of the Swiss Watch Industry, watch sales in the city dropped 23.2% in the period between January and November 2015. Over on the mainland, sales dropped 5.5%. Overall, the global sales fell 3.3%, the biggest slump since 2009. Unsurprisingly, given the economic conditions, doom and gloom hung over the build-up to the first big trade show of the year, the Federation of Swiss Watch Industry organised Salon International de la Haute Horlogerie in Geneva, Switzerland. Seeking to invigorate proceedings, the organisers surprised everyone by expanding the number of brands on show and injecting some much-needed buzz and enthusiasm.

Givaudan Decides to Set up Fragrance Facility in Changzhou National High-Tech District
Published by, 28th January 2016
Swiss fragrance manufacturer Givaudan signed an investment agreement to set up a fragrance production facility with a registered capital of USD 34.2 million in Changzhou National High-Tech District (CND), China. Total investment is set to reach USD 99.8 million. Givaudan, based in Geneva, Switzerland, is the global leader in the fragrance and flavour industry, offering its products to global food, beverage, consumer goods and fragrance industries. Meanwhile, Givaudan is also the raw materials supplier of the top global perfume brands. In 2014, the sales achieved CHF4.4 billion and the market capitalization reached CHF17 billion. Givaudan has established its Chinese headquarters in Shanghai and offices in Beijing, Guangzhou, Hong Kong, as well as in other cities. Willem Mutsaerts, Head of Global Procurement of Givaudan, said, "After considering a number of Chinese cities, Givaudan finally chose CND as the optimal locale for its new fragrance facility in China and has strong confidence in the upcoming CND project. As an industry leader, Givaudan is very optimistic about the future of the Chinese market. The CND project, a large investment for Givaudan, is expected to lay a sound foundation for the company's development in the market. 
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Legal / Trade / Consulting / Services

Swiss Television Interviewed Mr. Paul Thaler
Published, 27th January 2016
On 25 January 2016 the Swiss TV (SRF) broadcasted an interview with Wenfei’s Managing Partner Mr. Paul Thaler in its program “ECO”. Mr. Thaler was asked about legal certainty for Swiss companies in China. Furthermore, some successful M&A - transactions of Chinese enterprises in Switzerland, which were accompanied by Wenfei were mentioned.
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