Switzerland grows closer with Taiwan through trade, investment and tourism

By Jost Feer, Director of Trade Officeof Swiss Industries Taipei  / 

Fri, Jul 30, 2004 - Page 4

On the occasion of the Swiss National Day, I am pleased to extend warm greeting to the readers of "Taipei Times".

A long-standing democratic and federalist tradition, political stability, tolerance of linguistic and cultural minorities, humanitarian commitment, wonderful Alpine scenery, chocolates, watches, banking: these are words, even cliches, which are still used when the subject of Switzerland is raised abroad. Actually, this is an enviable situation for a country that has been able to enjoy years of prosperity and to build up a high standard of living.

Talking about economic and trade relations between Switzerland and Taiwan, one has seen an enormous increase in bilateral trade exchanges in the past 25 years, mainly due to the fast industrial development of Taiwan. It can be noted that both countries have many similarities in common with regard to the surface (Switzerland 41'284 km2; Taiwan 36'000 km2), arable land (about 75 % of the surface is mountainous) and raw materials (practically no raw material available).

In both economies, the small and medium-sized companies are the backbone of the industry which is geared to a high degree of export activities. The productions of the two industries are also complementary to each other. In the agricultural sector, both represent the same interests in the "G10" of the WTO negotiations.

In 2003, Switzerland was Taiwan's 39th most important export partner and its 22nd largest import market. Taiwan has become one of the most important market for Swiss exports in East Asia (after Japan, Hong Kong and China), while Switzerland is certainly one of the most important European buyer of Taiwan-made products on a per-capita basis. Within 15 years, exports from Switzerland have more than doubled. Given by the significance of Taiwan textile industry with its demand for modern production equipment, textile machines accounted for over 40 % of the total exports some 20 years ago. With the completion of the expansion and modernization program of the local textile industry, exports of textile machines have gradually decreased (now only about 3 % of the total) and emphasis shifted to other industries such as electronics, semiconductor and pharmaceuticals.

In 2003, machines accounted for 45 % of the total exports, namely machine tools, graphic machines, printing machines, textile machines and food processing machines. However. Switzerland is also an important supplier of machinery/equipment for the electronics and semiconductor industry.

Owing to the import liberalization, the changes of the consumer habits and the increasing purchasing power, the share of consumer goods such as watches in particular, but also textile products, shoes and foot items have gained in importance. Watches accounted for 15 % of the total exports, a figure which grew steadily over the past 10 years. On a worldwide basis, Taiwan became the 13th most important export market for the Swiss watch industry.

Switzerland has been a stable market for Taiwanese products of various kinds, particularly personal computers and peripherals, electric and electronic part, bicycles and small machinery. The share of traditional export products such as textiles and textile goods has slowly been diminishing, but demand for Taiwan's high-tech products has been on the increase. The Swiss market for Taiwanese products may be regarded as small in comparison to the size of the population, but it offers certain rewards for the quality-minded Taiwanese exporting companies to meet the challenges of a sophisticated market. Due to its diversity and high-demands, the Swiss market is often used by foreign companies as a test market for European tastes.

Swiss companies have been active investors in Taiwan for many years. The first branch office of a Swiss company on Taiwan was established back in 1949. Over the years, more than 100 companies have followed and the number keeps rising. The latest one is a company in the field of coating equipment for the flat-panel industry. Switzerland ranks fourth among European investors in Taiwan, after the Netherlands, United Kingdom, and Germany.

About 15 % of the Swiss companies in Taiwan are engaged in manufacturing such as chemicals, machines, electronics/electrical goods, mainly for exports. Trading/forwarding companies have set strong roots on the island and are dominantly represented in their respective fields. Owing to the liberalization of the service industry, banks, insurance and forwarding companies could be added to the list. Some of the companies have started to use Taiwan as a base for their regional business activities (e.g. marketing/sales and after-sales-services) and this trend is likely to continue.

So far, only some 10 Taiwanese companies have set foot in Switzerland. With increasing sales and marketing activities of Taiwanese companies in Europe, there are tremendous opportunities ahead to set up business operations in Switzerland such as European headquarters.

Switzerland offers excellent advantages because of its central location in Europe, established communication network, links with the EU, multi-lingual workforce, low taxes and other benefits. Furthermore, its proximity to some of the finest universities and research institutes gives companies a considerable advantage to put efforts into innovative product development, particularly in IT and biotechnology.

Switzerland has become a very popular destination for Taiwanese tourists on their itinerary through Europe. After all, Switzerland can offer foreign visitors a quality package of services including memorable holidays, first-class gastronomy, world-class cultural events and -- foremost business and investment and opportunities. Come and see for yourself!