Switzerland is among the first Western countries to acknowledge and establish diplomatic ties with the People's Republic of China.

Some well-known Swiss companies established many firsts Sino-Swiss ventures since China adopted the reform and opening-up policy. The Swiss government is also among the first European countries to recognize China's full market economy status when China entered the World Trade Organization (WTO).

Switzerland now becomes the first country in continental Europe and the first of the world's top 20 economies to reach a Free Trade Agreement (FTA) with China.

The FTA between China and Switzerland can help extend bilateral economic and trade cooperation, but also encourages the fight against trade protectionism worldwide.

China and Switzerland reached a comprehensive and high-level agreement after the nine rounds of free trade negotiations that have been held since April 2011. The FTA deal covers issues regarding bilateral cargo trade, services trade as well as new issues, such as environmental protection, employment, intellectual property and market competition.

Both parties agreed to give each other zero tariff or lower ones for a majority of products in order to facilitate trade liberalization.

This is a mutually beneficial progress, “The implications of which will be significant”, as Premier Li Keqiang's said, in a signed article published on May 23 in the Swiss newspaper Neue Zürcher Zeitung.

China and Switzerland's FTA will form a wide range of areas of economic and trade cooperation. China and Switzerland are complementary, rather than competitive in economic and trade development. China, the world's largest developing country, has a huge market demand and potential for development; while Switzerland is a developed European country with major scientific and technological innovations, as well as competitive industries.

The economic and trade relations between the countries have witnessed a long-term healthy and steady development. The bilateral trade volume between the two countries has increased from US $6.8 million to US $30.8 billion in 2011. Despite the prolonged Eurozone sovereign debt crisis and uncertainties in the world's economy, the China-Switzerland bilateral trade volume remained as high as US $26.3 billion in 2012.

China is Switzerland's largest trading partner in Asia, while Switzerland is China's seventh largest trading partner. Approximately 400 Swiss enterprises have established over 900 affiliated branches or agencies in China, according to the Swiss ambassador to China Jacques de Watteville.

Switzerland urgently needs the great potential of the Chinese market to deal with its own challenges. The domestic market in Switzerland is too limited to explore adequate marketing channels. Export, therefore, becomes Switzerland's overall development strategy.

In recent years, the United States and European countries, Switzerland's largest and second largest trading partners, have accelerated free trade talks. Switzerland would be disadvantaged in the competition with the European Union (EU) if the EU and the United States reached a FTA deal, which would weaken Switzerland's dominance as a research and development center of high-end manufacturing industry.

Switzerland has to enhance the competitiveness of its domestic enterprises and boost sustainable development through the construction of various bilateral or regional free trade zones' agreements.

China and Switzerland FTA will unlock new trade opportunities between China and European countries, and will also set a good example for establishing close ties with the EU. Switzerland is not a member of the EU, but both of them belong to the European Economic Area (EEA). They have signed approximately 120 cooperation agreements that ensure free trade.

The creation of a China-Switzerland free-trade zone, which follows the country-of-origin rule, doesn't mean that Chinese products can use Switzerland as a springboard to enter the European market, but it makes it possible for China to export half-finished products to Switzerland for processing and then selling the finished products in the EU, which would extend the European market.

Switzerland also has a large number of advantages that attract foreign investors, including the stable political environment, friendly commercial atmosphere, flexible labor market, favorable infrastructure as well as top-notch scientific research institutions. Switzerland has always branded itself as a gateway for Chinese companies in Europe, hoping more of them to settle there.

The establishment of a free-trade zone is a significant milestone for the China-Switzerland bilateral economic and trade relations, and it will also provide valuable lessons for China as to the establishment of free-trade zones with other developed countries. Grasping this excellent opportunity, the China-Switzerland economic and trade cooperation has a brighter future.

The article was translated by Gong Yingchun. The original unabridged version was published in Chinese. From: http://news.sina.com.cn/c/2013-05-25/145927223631.shtml

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