Minister warns of ‘strategic’ Chinese takeovers of Swiss firms

Agribusiness giant Syngenta is one of many Swiss companies that have been acquired by Chinese firms in the last few years. Keystone

Swiss Communications Minister Doris Leuthard has expressed concern about potential acquisitions by Chinese firms of 'strategically sensitive' companies in Switzerland. During a visit to technology companies in southern China, she called on the government to reflect on the issue.

“We must do what Germany did many years ago, which is hold a discussion on how to react in the face of Chinese firms’ hunger for takeovers,” declared Leuthard in an interview published on Monday in the Aargauer ZeitungExternal link.

According to Leuthard, Switzerland should insist on reciprocity, which means that takeovers without conditions should only be allowed if conversely, 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 argues.

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In case of companies that are strategically important to Switzerland, she believes the majority ownership should stay in Swiss hands and the Swiss Competition Commission should evaluate each case.

Risks of spying

With regards to Chinese companies building mobile networks in Europe, the Communications Minister said that she is aware that critics are concerned about risks of spying. “We don’t have anything negative to report,” she affirmed while also clarifying that it isn’t possible to be totally secure in the digital age. Consumers shouldn’t be naive and should take precautions to protect their data.

According to Leuthard, the digital economy in China is very innovative and Beijing invests a lot in research and development. The era where China is considered world champions of counterfeiting is over, she said.

There have been several notable merger and acquisition deals by Chinese firms in Switzerland in the last few years, including the record $43.3 billion (CHF43.06 billion) takeover of agrochemical giant Syngenta by the China National Chemical Corporation (ChemChina) in 2016.