SWI swissinfo.ch: Swiss government rejects takeover restrictions on Chinese firms

Front page - SWI swissinfo.ch

Takeovers
Swiss government rejects takeover restrictions on Chinese firms
This content was published on February 14, 2019 11:01 AM Feb 14, 2019 - 11:01
Swiss and Chinese flags

The government says restricting capital flows into Switzerland would increase red tape
(Keystone)

The Swiss government has dismissed talk of introducing investment controls on Chinese companies despite requests from parliament to examine the risks.

The Federal Council (the executive) responded to a request from parliament to look at the risks of such investment to Switzerland and possible measures. It concluded that current laws were sufficient for dealing with any potential threats.

Introducing such controls would currently bring no additional benefits to Switzerland, the government said in a statementexternal link on Wednesday.

“On the contrary, restricting capital flows into Switzerland would increase red tape, generate uncertainty and make Switzerland a less attractive place to invest. However, the Federal Council intends to conduct a monitoring procedure and review the report within the next four years,” it said.

In recent years, Chinese state-run or state-backed companies from emerging economies have increasingly been investing abroad, in some cases for reasons of industrial policy. Such direct investment in Switzerland has led to fears that this may result in a loss of jobs and expertise, and that national security may be put at risk.

+ Why more Chinese companies will come to Switzerland

In August, former Communications Minister Doris Leuthard expressed concern about potential acquisitions by Chinese firms of “strategically sensitive” companies in Switzerland. 

Leuthard believed Switzerland should insist on reciprocity, which means that takeovers without conditions should only be allowed if Swiss firms can make acquisitions in China. Currently, Swiss firms are only allowed to have joint ventures with Chinese firms.

“It is important that Swiss and Chinese companies negotiate on equal terms,” she said.
Monitoring procedure

There have been several notable merger and acquisition deals by Chinese firms in Switzerland in the past few years, including the $43.3 billion (CHF43.7 billion) takeover of agrochemical giant Syngenta by the China National Chemical Corporation (ChemChina) in 2016 – the biggest acquisition ever by a Chinese company. 

“Current legislation allows the authorities to effectively counter any potential risks,” the government said on Wednesday. “In the field of IT pertaining to critical infrastructure, the Federal Council will also examine what targeted measures are needed to further improve resilience against abusive foreign activities.”

However, the government said it was aware of the possible risks associated with direct investment and intended to conduct a monitoring procedure and review the report over the next four years.

“With an acceptable level of administrative expense, this instrument will show whether there is a need to take appropriate steps in the future. Furthermore, in future the Federal Council will give greater consideration to the question of reciprocity,” it said.


Dragon magnet
Why more Chinese companies will come to Switzerland

Keystone-SDA/ts
Tags

    Politics
    Business

Neuer Inhalt

Horizontal Line
SWI swissinfo.ch on Instagram

SWI swissinfo.ch on Instagram
SWI swissinfo.ch on Instagram
subscription form

Form for signing up for free newsletter.

Sign up for our free newsletters and get the top stories delivered to your inbox.
Email address
Top stories (weekly)
Latest news (daily)
Business (weekly)
Politics (weekly)
Society (weekly)
Fintech (biweekly)
Multinationals (biweekly)

Click here to see more newsletters
There are 2 comments on this article.
Write a comment...
"Wanderer commented on the content at 14 February 2019 11:40".
Wanderer 14-Feb-2019 11:40
Best learn what Chinese money can do to you from London's Oxford and Regent Street.
Write an answer...
"Democracy in action commented on the content at 15 February 2019 14:47".
Democracy in action 15-Feb-2019 14:47
I feel the Parliament's view should be heeded by the Federal Council, in this instance. Risks should be assessed and the need for controls weighed against these risks. Also the time frame of four years stated by the Federal council seems way too long.
This is one place where the parliament representatives, with a wider base of representation, and hearing the variety of viewpoints of their constituents is closer to the ground and better able to make an informed decision than the executive arm of swiss government.
Write an answer...
Related Stories
A Chinese dragon mask
Emerging world power
Switzerland ponders response to China’s expansion
Former ChemChina chairman Ren Jianxin and Michel Demare of Syngenta in 2016
Step towards merger?
Sinochem and ChemChina move closer with Syngenta appointment
Man wears Rolex watch
Problem remains
Chinese courts frustrate anti-fake watch measures
This content was published on January 26, 2019 1:41 PM
Chinese Vice President Wang Qishan (left) and Swiss President Ueli Maurer
Future relations
As Chinese economy slows, Swiss seek greater access
Footer

    The company
    Partnerships
    Imprint
    Jobs
    Play SWI
    Newsletter subscription
    Contact

World partners

    Radio România Internaţional
    Radio Canada International
    Radio Praha
    Polskie Radio

Business Units SRG

    RTS SRF RSI RTR SWI

Follow us

Front page - SWI swissinfo.ch
swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR