RE:RE:RE:RE:RE:RE:USA Inflation Reduction Act (IRA) 2022 Re: Biotech and ChinaAugust 20, 2024 - Switzerland is Getting Squeezed Between China and the United States of America. Now, Switzerland’s vaunted pharmaceuticals industry with its attendant biotechnology sector is nervously eyeing proposed new US legislation that could curb its ability to collaborate with China.
“There is an uneasy feeling,” said Jean-Philippe Kohl, deputy director of Swissmem, the association for Switzerland’s mechanical and electrical engineering industries. “Geopolitical tensions are particularly sensitive for companies that manufacture high-tech products,” like those at which Swiss excel, he said. “Five to ten years ago, such concerns were not yet an issue.”
More recently, Switzerland’s been feeling the heat. It was criticized by Western partners for refusing to allow its weaponry to be sent to Ukraine to defend against Russia’s invasion as well as for allegedly lax implementation of sanctions against Moscow over the war. The fact it joined EU sanctions in the first place was viewed by many Swiss as a de facto end of the country’s century-old neutrality principle.
Its engagement with China has been similarly mixed. Beijing lifted visa requirements for Swiss tourists and business travelers in January when Premier Li Qiang visited and laid the foundations for a memorandum of understanding formalizing both sides’ intention to modernize the FTA. That didn’t stop China rebuffing the Swiss government by skipping Switzerland-brokered talks on Ukraine in June. Meanwhile, Syngenta Group — a Swiss agrichem giant owned by Sinochem Holdings Corp. of China — withdrew its long-delayed application for a $9 billion initial public offering in Shanghai, in a sign of the regulatory risks foreign companies have to deal with in China.
Yet while others move to “de-risk” business with Beijing, Swiss exports — notably of products like machines, pharmaceuticals and watches — destined for China have outstripped those from either the EU or the US, growing by three-quarters since the trade deal was implemented compared to the EU’s 54% and the US with 20% in the same period, according to Swiss customs data.
“That the US will one day say that we have to stop this transfer of technology is a primal fear of many companies,” said Kohl of Swissmem, adding that it would be “a disaster” if they had to choose between the US or China. “Withdrawing from China would be impossible and would be tantamount to a ‘partial amputation’ of their company,” he said.
In 2022, the Swiss government decided behind closed doors not to follow EU sanctions against China over allegations of human rights abuses in Xinjiang province. More recently, it opted against extending its current China strategy once it expires at the end of the year. In both cases, members of parliament criticized the government for taking a soft line to avoid triggering economic repercussions.
It’s an approach that looks increasingly untenable as the US expands its use of export controls against China, roping in allies for bans on technology like chipmaking equipment. That deepening standoff with China is a rare point of agreement between the Democratic and Republican presidential campaigns, suggesting no let up for Switzerland or anyone else after the November election. “Switzerland has often focused on adaptation and deal-making, which has worked well until now,” he said. “But now other values are becoming important.” https://www.bnnbloomberg.ca/business/international/2024/08/20/switzerland-is-getting-squeezed-between-china-and-the-us/