Dear Members and Friends

The holiday season is upon us. The annual slowdown is preceded by a flurry of last-minute activities, followed by a hectic time of social commitments. Did you plan to take some real down time to reflect, recharge, and prepare for 2024?

Looking at the events that unfolded in 2023, the unresolved issues left over from the pandemic, we take more than the usual amount of variables into 2024. How can we best position ourselves and our companies? What are the hot spots and what are the short-term opportunities?

Allow us to give you some input for these quiet moments of the holiday season. The takeaways from our November business mission are manyfold. The one that struck us most is the wild ride from opportunity to risk and back again. Chinese entrepreneurs have learned that there is more to business than growth. Business models based on growth have had to be rethought and changed. How does China as a whole deal with failed companies? China’s bankruptcy laws are cumbersome, often saddling business owners with debt and making it difficult to start over. Is China changing the relevant regulations, or is the business culture getting in the way?

With changes in debt restructuring and bankruptcy laws, China would become a market that mirrors many other mature markets. China is in most respects a mature and developed economy. Sure, it has “Chinese characteristics” due to the sheer size of its population and markets. Its governance structure adds to the “Chinese characteristics”, but in our view, even the Chinese government has to bow to the complications and dynamics of the domestic markets.

Observing the economic landscape on a flight from Shanghai to Hong Kong reveals the immense build-up of economic activity over the past decades. The challenge is to sustain this economic machine, which operates around the clock to meet both global and domestic demands. The question arises: Is the overcapacity we see in many Chinese industries a result of the need to keep this economic engine running, coupled with government-set KPIs for industrial development?

The transition from the growth-dependent model discussed earlier should ideally result in a halt to the creation of further industrial overcapacity. Take the example of the electric vehicle (EV) industry, where more than 150 brands are vying for market share – a clear illustration that uncontrolled overcapacity drains capital and delivers inadequate returns on investment.

Too often we have seen the Western community predict the demise of the Chinese economy. And too often, the Chinese government has made regulatory changes that have paved the way for solutions that avoid the conundrum. With the Chinese New Year (CNY) set for February 10, there is plenty of time between now and then to change regulations and provide new rules of the game. The WEF Davos is well ahead of CNY, making it an ideal place and time to engage with the Chinese delegations that plan to attend. It’s another demonstration of Switzerland’s long-standing special role in interacting with the Chinese economy. Are you ready to play your part and assess the risks and opportunities?

We wish each of you a peaceful, restful, and joyful time. Let’s set ambitious yet realistic goals for the coming year, mindful of the dynamic landscape we navigate. The next newsletter will be published in early January 2024.

Kind regards

The SCCC bylaws approved in 2016 state that each board member, including the president, may serve a maximum of 4 election cycles of 2 years each. In addition, a board member must be under the official retirement age at the time of the 2-year election cycle.

With heavy heart, our current President Felix Sutter's term is ending at the AGM in Spring 2024 due to both time served and retirement age. Therefore, the SCCC is now calling for interested candidates. Please send your application with your CV to president@sccc.ch by December 31, 2023.

To be eligible for election, candidates must, among other criteria, have a relevant professional relationship with China, several years of experience working in and with mainland China’s business community, and the seniority and experience to interact with government agencies and senior members of the Swiss and Chinese governments. The president of the SCCC is a pro bono role, the expected time commitment varies, on average it is 30 percent of the annual professional working time. There are no expenses paid to board members or the president.

In January 2024, the board will form a finding committee to review the applications received. Candidates who meet the criteria for the role will be interviewed. After the interviews, a shortlist will be presented to the board, and subsequently, the general assembly will vote on it.

Are you interested in contributing to the Sino-Swiss business relations and beyond? Then get in touch with us. For questions, please contact us at president@sccc.ch or info@sccc.ch.

Yīng xióng suǒ jiàn lüè tóng.

Great minds think alike.