Reader's Digest, 27 August - 9 September

Swiss and Chinese Business Related News in Switzerland and China

BILATERAL RELATIONS

Chinese Ambassador Met Swiss Finance Minister at his Official Residence
Published by China Embassy, 29th August 2016
On 26 August, Chinese Ambassador to Switzerland H.E. Geng Wenbing met the Swiss Federal Councilor and head of the Federal Department of Finance, H.E. Ueli Maurer at his official residence. The two sides exchanged points of views on bilateral relations, financial cooperation. Ambassador Geng said that Switzerland was China's first strategic innovation partner and he also introduced China’s current economic situation, diplomatic policy and information about G20 Summit in Hangzhou.
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BUSINESS NEWS

2016 China Economic Report
Published by admin.ch, 7th September 2016
Released by Economic and Commercial Section at Embassy of Switzerland in Beijing, the report focuses on the evolution of Chinese economics. In summary, China is undergoing a major economic transformation from export-led growth to a model increasingly driven by consumption and services under the “New Normal”. Chinese authorities have launched a series of reforms to facilitate customs procedures for imports and exports and to modernize the agricultural sector through mechanization as well as promotion of food safety. China GDP growth has consistently decelerated since 2010 to 6.9% in 2015. As private consumption will probably not fully compensate for overcapacity in real estate and heavy industries, the GDP growth rate is likely to slow down further. Lackluster external demand in 2015 resulted in the first annual Chinese foreign trade contraction since 2009. China has completed a major reform of her taxation system in 2016. Switzerland’s trade with China since the free trade agreement entered into force on July 2014 continues to be positive for Switzerland. The majority of Swiss companies in China continue to consider the country as a relevant investment destination.

Chinese FX Reserves Decline while Swiss Reserves Rise in August
Published by econotimes.com, 7th September 2016
The latest data from People’s Bank of China (PBoC) shows that FX reserve in China is continuing their decline and in August the total reserve has declined to USD 3.185 trillion, down half a percent from July. The reserve is still decline but compared to last year, the decline has slowed down a lot. In June 2014, China’s foreign exchange reserve has touched the highest on record top USD 3.99 trillion. The reserve is down more than 20% from the peak. However since January, this year it has stabilized.  Since January, it is down just 0.04 trillion. Last year, reserve declined just short of USD 600 billion. Some of the other indicators from China, such as house prices and PMI reports also pointing to stabilization, if not recovery. While China’s story has been about the bleeding of the reserve, it has been just opposite for Switzerland, which is suffering from a chronic problem of increase in foreign exchange reserves due to the intervention of Swiss National Bank in order to keep the exchange rate steady, and inflows of foreign funds. In August FX reserve increased by USD 12 billion, and it has increased from USD 227 billion in 2012. The Swiss National Bank (SNB) abandoned its euro-franc peg in January last year but FX reserve has increased by USD 130 billion since, which is equivalent to almost 20% of GDP.

Recovery from Watch Slump within Sight
Published by Ralph Atkins, swissinfo.ch, 5th September 2016
Swiss watch export data – a closely watched barometer of trends across the sector – showed a 14.2% fall year-on-year to July, provoked by the combined impact of weak global economic growth, a collapse in Hong Kong, terrorism in Europe and competition from smartwatches. But some have spotted the early signs of a turnaround, in part prompted by Britain’s vote to leave the European Union in June. “We’re definitely in a bottoming-out process. But it is difficult to call the timing,” said Scilla Huang Sun, a luxury sector specialist at GAM Investment Management in Zurich. “The ‘new normal’ is not as disastrous as people think because the US [economy] is growing, Europe is weak but it is not negative growth, and concerns about China have abated,” she added. One reason for confidence is that the main causes of the downturn were clearly identifiable – and show signs of easing. Much of the gloom has surrounded Hong Kong, previously the biggest export market for Swiss watches. Luxury consumer goods sales in Hong Kong have been hit over the past few years by shifts in tourism flows as Chinese customers shopped elsewhere; But luxury goods manufacturers report signs of sales recovering in mainland China. Chinese consumers largely powered the sector’s revival after the global financial crisis of 2008. Spending on luxury watches was subsequently hit by Beijing’s clampdown on corruption, which resulted in less “gifting” of high-quality timepieces. 

Investing in Switzerland
Published by chinainvestment.com.cn, 3rd September 2016
Switzerland has a proud reputation for being a gateway to the European market, one of the world’s most stable economies, and home to a competitive business environment. It’s therefore no surprise that it attracts investors from all over the world. Under its mission to promote trade and investment in Switzerland, the Swiss Business Hub in China shared the benefits of investing in Switzerland with China Investment magazine, including strong industrial clusters, innovation capacities, a favorable tax system, and high-level workforce.

China’s Moves Show it’s Banking on the Future
Published by globaltimes.cn, 31st August 2016
Mr. Frank-Jürgen Richter, founder and chairman of Horasis, a Swiss-based global visions community organization and host of the annual Horasis China Meeting, the world's foremost business meeting on China held outside the world's second-largest economy, shared his opinion on China’s banking with Global Times. In 1997 China resumed its sovereignty over Hong Kong after having being administered by the UK for 156 years. But there were stipulations: one was that Hong Kong should retain its capitalistic economic system for a further fifty years as drafted under its Basic Law. This permitted Hong Kong to remain somewhat independent of Beijing under the principle of "one country, two systems." Now, nearly 20 years later, we are seeing many changes as the two draw closer. One notable event is an agreement to link-up the Shenzhen bourse with Hong Kong's. But this is not an entirely novel situation, it almost copies the link between the Shanghai and Hong Kong bourses that was set up two years ago. The new trading system, like its Shanghai exemplar, will have daily limits for north and southbound trades. But it will permit large capitalization funds to flow, allowing overseas investors to enter the market and possibly reducing the mainland share prices to more reasonable levels. In recent years, Beijing has been a little worried by the media attention of capital outflows from China. However, in comparison with the billions of outward direct investment (made easier in this new tie-up) only a few million US dollars could be designated as capital outflow; and some of this represents house purchases for expat families who are educating their children abroad.
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CULTURE & SOCIETY

Shanghai Tourism Festival - Weidfäger Wolhusen & Brass Band MG Oberrüti
Published by sinoptic.ch, 1st September 2016
One of the highlights of the Shanghai cultural agenda is the yearly Shanghai Tourism Festival. The city celebrates its 27th edition from 10 to 13 September. Performers from all over the world will descend on Shanghai to entertain locals and tourists alike with activities reflecting cultures and customs from their home countries. This year, the festival launch starts with the grand opening at Huaihai Road (close to the Shanghai Times Square) in the evening of 10 September. "Weidfäger Wolhusen" and "Brass Band MG Oberrüti" are representing Switzerland in the parade. The Swiss musicians will perform during the whole festival at different venues in Shanghai.

Real Fiction Cinema
Published by sinoptic.ch, 1st September 2016
This non-commercial temporary art installation will take place in Shanghai providing a unique perspective of temporary art intervention in public art. Compromising three cinemas at three locations, Real Fiction Cinema is curated by Klaus Littmann in conjunction with artist Job Koelewijn. The art project started in November 2010 in Zurich and has since travelled to many places, including its first stop in China in Dongguan city, attracting 200,000 visitors. A broad window–serving as the “real projected screen”–documents live every second, minute and hour. By supplementing the “real cinema” with soundtracks from well-known films, the screenplay and the plot of the films are shaped according to the principle of “planned chance”. As one critic said, the project allows “the imaginary and the real flow together in a way that we have never experienced before”. Each cinema can accommodate 23 viewers at a time. A concurrent film projection will be presented at Shanghai contemporary Art Museum from 27 September till the end of November, where interaction of the visitors will be happening from the three locations.

2016 Shanghai International Chinese Dragon Boat Tournament
Published by sinoptic.ch, 1st September 2016
On 23 and 24 September, the annual dragon boat race will take place at Cao Gang River in Shanghai. 28 teams from China, Switzerland, Australia, Canada and others will fight for the trophy. The teams must master two racetracks, one 500m straight lane race and one 5000m circuit race. It is the first time to see a Swiss presence in the race. Sonya Loher, the team captain, is a Swiss who has been living in Suzhou for seven years now together with her family of four. They decided to compete under the name of “Swiss International Dragon Boat Team Suzhou”, which is formed of the “Vipers-Bainiangzi” girls’ team and the “Jiulian-Power-Vipers” men’s team.
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GENERAL INTEREST

Connecting People around the Gotthard: Swiss Alumni Event 2016
Published by eventbrite.com, 7th September 2016
The Consulate General of Switzerland in Hong Kong cordially invites Alumni of Swiss Public Universities and Universities of Applied Sciences currently living in Hong Kong and Macao (incl. former exchange students) as well as current exchange students from Switzerland in Hong Kong to the traditional Swiss Alumni Event 2016: Connecting People Around the Gotthard: Swiss Alumni Event 2016. On 1 June, 2016, Switzerland celebrated the opening of the world’s longest railway tunnel, which was a milestone of worldwide significance. For this occasion we invited Prof. Emeritus Christian Schlüchter – Assistant Professor between 1986 and 1983 at the Institute of Geology at the ETHZ and Professor and Chair in Quaternary and Environmental Geology at the University of Bern – to talk about this masterpiece in engineering from a geological point of view. Join us for this fascinating talk about the geology and the difficulties to cut a tunnel through the Gotthard Massive. Additionally the Consulate General of Switzerland will present a small exhibition which documents the Gotthard Base Tunnel from sketch to construction, proudly brought to you by Presence Switzerland.

Guo Weimin Meets Swiss News Delegation
Published by scio.gov.cn, 27th August 2016
On 24 August, Mr. Guo Weimin, the vice minister of the State Council Information Office met with a Swiss news delegation led by Mr. Guy Mettan, president of Geneva Press Club, in Beijing. Since its creation in the autumn of 1997, the Swiss Press Club has received more than 30 Heads of State and Prime Ministers. It has organized more than 1,800 events, including a hundred or so press conferences, with the participation of prestigious ambassadors and key figures. The mission of the Swiss Press Club  – Geneva Press Club is to welcome and assist journalists visiting Geneva and to favor exchanges between Swiss and international players in the sectors of economy, politics, culture and science on the one hand and between the Swiss and international press resident in French-speaking Switzerland and neighboring Switzerland on the other hand.

I am in Hangzhou: Entrepreneur Lucas
Published by China Daily, 27 August 2016
The 33-year-old Swiss national is spreading the word that expats can play a big role in China's entrepreneurial transformation. He is the founder of ni hao, a mobile app that aims to make life easier for expats in China by providing useful tools and information. The app has more than 100,000 registered users. "We hope this product will build a bridge between the Chinese and foreigners," he said.
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INDUSTRIES

Engineering / Manufacturing

ChemChina Rolls over USD 43 billion Syngenta Offer
Published by channelnewsasia.com, 6th September 2016
State-owned China National Chemical Corp. said Tuesday it was extending its USD 43 billion agreed takeover for Swiss pesticide and seed giant Syngenta until November. The company, also known as ChemChina, said the offer for all Syngenta's shares in what would be by far the biggest-ever overseas acquisition by a Chinese firm was now open until at least 8 November. "As previously stated, extensions to the tender offers are expected to occur until all conditions to the offers are satisfied, including obtaining all applicable regulatory approvals," ChemChina said in a statement. The offer for Syngenta shares, announced in February, was extended in May and July, and was due to expire on 13 September. "All of the other terms and conditions of the tender offers remain unchanged and ChemChina continues to expect to conclude the transaction by the end of the year," said ChemChina. Last month a US national security regulator approved the merger, and the companies said a number of anti-trust regulators around the world still need to approve the deal.

ABB: IoTSP is the Future of Manufacturing
Published by abb.com.cn, 27th August 2016
Dr. Chunyuan Gu, Senior Vice President of ABB Group and Chairman and President of ABB China, was invited to make a keynote speech on Internet of Things, Services and People (IoTSP) and the future of manufacturing at Master Class of China Europe International Business School (CEIBS). He discussed tendency of IoTSP and its profound influence on future manufacturing with distinguished guests. Dr. Gu started his speech with the challenges for manufacture upgrading and future development momentum. He said, “In the face of challenges in labor, land, energy shortage and aggravating environment issues, the manufacturing industry needs to realize sustainable development in highly networked and collaborative ecosystem through reduced costs, higher quality and productivity. Technology and innovation will be the key to reach this goal.” As new materials and technologies are driven by basic research of frontier science, technological development, and business and policy impetus, manufacturing industry sees higher competitiveness. This can be proven by globally emerging innovations and advance in manufacturing process, automation and precision manufacturing, new materials and multi-scale manufacturing system, measurement & test, manufacturing system and sustainable development.
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Bank / Finance / Insurance

Credit Suisse Upgraded China Distance Education
Published by breakingfinancenews.com, 5th September 2016
Credit Suisse has upgraded China Distance Education from Underperform to Neutral in a statement released on 5 September 2016. Just on 4 September, China Distance Education traded 0.46% lower at USD 10.89. The company’s 50-day average is USD 10.66 and its two hundred day average is USD 12.12. The last stock price is down 10.16% relative to the 200-day moving average, compared to the S&P 500 Index which has seen no movement over the same time. 60,597 shares of DL exchanged hands, down from annual average volume of 72,585. China Distance Education Holdings Limited (CDEL) is a holding company, which is engaged in providing online and offline education services, and selling related products in the People’s Republic of China. The company focuses on professional education, and helping professionals that aim to obtain and maintain professional licenses.

China Faces 20% Chance of a Hard Landing, Says Swiss Re
Published by cnbc.com, 31st August 2016
Not everyone is convinced that China may come out of its economic transition unscathed. Swiss Reinsurance is putting the risk of a hard landing in the world's second-largest economy at 20%. At the heart of its concerns is the high level of indebtedness in the economy, much of which can be attributed to state-owned enterprises (SOEs) and companies, Swiss Re's chief economist Kurt Karl told CNBC's "The Rundown". The share of debt to gross domestic product (GDP) has risen to around 250%, Karl said. It was 120% around five years ago. "This rapid increase coupled with the fact that so much income (is used) to pay for the debt's interest payment; (the situation) becomes stressful," he said on Wednesday. "So far (the government) has done fine, but we do have a 20% chance of a hard landing." He conceded, however, that the Chinese government may be able to evade the problem by stimulating the economy and restructuring the SOEs. After years of turbo-charged growth fueled by debt, China's economic slowdown is raising concerns about whether it now has the ability to pay off those loans. For 2015, Beijing logged 6.9% growth, its slowest pace in 25 years. Growth edged down to 6.7% in the second quarter of 2016.
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Hospitality / Tourism / Retails

Why Setting up a Business in a Different Country is Constant Fun
Published by linkedin.com, 6th September 2016
CHEERS Wines founder and CEO, Ms. Claudia Masueger has released her latest article post - "Why setting up a business in a different country is constant fun" and gives her advice on doing business in China. Arriving in a different country, not knowing anyone or even understanding a word, that’s what Claudia did, in China, where full of her curiosity can fully be satisfied. Discovering a new culture or just a new city is always extremely exciting as we discover every day crazy new things which you would never thought exist and we keep learning. That’s exactly how she felt when she arrived in China. Started in 2007, when she started discussing expansion with her father in Switzerland and the various potential wine markets in the world. They looked at Brazil, Russia, India and China. China was quickly selected as it seemed to have high potential, while at the same time exciting and extremely challenging. She started doing research online, then travelled to China to discover more about the market. She used to attend every possible network event when she started in Beijing in 2008. This led me to meeting very interesting people and learned so much from it and she was surprised at how helpful others were in sharing their experiences. Now Claudia wants to share her advice: Learn the Game and become an Expert; Don’t trust – control; Change your hard-disk, which means taking your European out and putting a new Chinese in.

Nestlé Confirms Greater China Head Change
Published by chinaretailnews.com, 26th August 2016
Nestlé has confirmed that its Greater China chairman and chief executive officer John Cheung will leave his current position and transfer to another important position in Nestlé Group. Cheung previously held an important position in Wyeth nutrition business, which was acquired by Nestlé, and boasted outstanding sales performance. In December 2012, Cheung joined Nestlé due to the acquisition and in April 2014 he was appointed chairman and CEO of Nestlé Greater China. Under Cheung's leadership, Wyeth nutrition business achieved continuous sales growth in China and reached CNY11 billion by 2015, making it the top provider in the Chinese infant formula industry. However, due to the depression of the macroeconomic environment, Nestlé's Greater China performance was not equally as good as Wyeth over the past two years. Cheung's replacement is Rashid Aleem Qureshi, chairman of Nestle Indonesia. Qureshi also has market and sales background and previously worked in Egypt, Malaysia, and Singapore.
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Legal / Trade / Consulting / Services

2016 International Conference on Management Science and Engineering
Published by fhnw.ch, 27th August 2016
Last week, over 100 guests from universities across China travelled to Switzerland, specifically to the FHNW in Olten for the 2016 International Conference on Management Science and Engineering. This is the 23rd time that the conference has been held by the Harbin Institute of Technology, but the first time that there has been a joint organizing and academic committee and an international partner (FHNW) playing such a central role. Over 100 presentations took place with papers being submitted by (mostly) lecturers and doctoral students from the University of Applied Sciences and Arts Northwestern Switzerland (FHNW), Harbin Institute of Technology, Harbin Engineering University, Fudan University, Beijing Foreign Studies University, Hong Kong Polytechnic University, Beijing Institute of Technology, Nan Kai University, Shanghai Maritime University, Southeast University, Hangzhou Dianzi University, Northeastern University at Qinhuangdao, Center for Socio-Eco-Nomic Development, Geneva , Shenyang University of Technology, Nanjing Audit University, Beijing Decision-making Consultant Center, China University of Mining & Technology, Dalian University of Technology, Hohai University, as well as universities from South and South East Asia.
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