Switzerland committed to the “New Silk Road” in 2019. But: what does this bring to Switzerland?
About 10 years ago, China launched the “New Silk Road” project, also known as the “Belt and Road Initiative.” The main project revolves around creating new trade routes or expanding existing ones.
Switzerland committed to the New Silk Road in 2019. At that time it signed a declaration of intent, or so-called “memorandum of understanding.” But: What did the “New Silk Road” bring to Switzerland?
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Did the “MoU” bring disappointment or is it a seal of quality for the Swiss economy?
Reuters/Tingshu Wang
If you ask about the benefits of the “New Silk Road” for the Swiss economy so far, Rudolf Mensch, chief economist at the comprehensive economic organization Economiesuisse, comes to a worrying conclusion: “Swiss companies have rarely participated. The projects have been planned, financed and built by the Chinese side.
The Chinese have great experience in large-scale projects. We don’t have these skills.
The chief economist at the umbrella organization Economiesuisse is not alone with this assessment. The memorandum also had little effect on the Swiss ambassador to China at the time, Bernardino Regazzoni.
In the declaration of intent, Switzerland and China expressed their support for close cooperation on the “New Silk Road.” Objective: Swiss companies should be able to participate in projects more easily. However, Mensch said this was not expected to immediately bring more orders into the Swiss economy. Because it is difficult for Swiss companies to participate in giant infrastructure projects. The Chinese have a lot of experience. “We don’t have those skills on this scale.”
An important political signal for China
In addition, the competition is often not entirely fair: “It is no secret that many projects receive joint support from China, and therefore service providers can offer very low prices that Swiss companies cannot keep up with,” says Mensch.
The results of Switzerland’s New Silk Road have been modest so far. Even former Ambassador Bernardino Regazzoni says that looking back, the MOU primarily benefited China. “Showing the presence of an important European economic partner is a good political outcome for China.”
The note is a seal of quality that can be trusted.
What makes this statement more serious is that the “New Silk Road” includes a strong geopolitical component. Or in other words: it also serves China in expanding its influence in the world. So, you gave China a lot and got nothing in return? No, says Martin Hirzel, president of Swissmem, the association of the Swiss mechanical, electrical and metallurgical industries. The declaration of intent is certainly helpful: “Even if the signing of this memorandum is only symbolic, it still opens the door for Swiss industrial companies. It is a seal of quality that can be trusted.”
In the long term, the “New Silk Road” could certainly bring something to Switzerland, says Rudolf Mensch, chief economist at EconomySuisse. The project leads to more trade and thus more growth in the countries concerned: “This in turn should have positive effects on the demand for Swiss products and services. But a few more years will pass.” It remains to be seen whether this hope will be fulfilled – and whether the benefits to Switzerland and China will be balanced in the long term.
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