They provide compelling evidence of China's economic achievement in recent decades, but also contextualize China's role in relation to the European Union and the US. This study focuses on the geopolitical turmoil caused by the rise of China and its economic and political impact on Switzerland.
1.1 _ Return to past greatness
The Communist Party of the People's Republic of China is determined to finally prevail. The relative superiority of the United States has also been broken in Africa and even South America (Dümmler and Anthamatten 2019).
1.2 _ Growing influence on several levels
The US is concerned that China is Djibouti's largest creditor, as Djibouti could impose restrictions on US activities (Burri 2019). It was not the first, but the last time that diplomacy and fidelity to facts collided in the preparation of the report.
1.3 _ Convergence remains theory
Consequently, China has been trying to redefine the term "democracy" for several years, calling itself a "socialist democracy" | 30 – in contrast to the (mostly) liberal democracies of the West. Russia is similarly working on the image of the West that should prevail among its population. China's image abroad must be shaped according to the will of the government in Beijing.
33 This is the headline on the Chinese website German.China.org.cn: "Reputation of the US 2021 as a "defender of human rights'' has thoroughly collapsed" (CIIC 2022a). 34 The storming of the Capitol in January 2021 was keen on the Chinese and Russian definition of democracy, according to China, the US claim to leadership of the West is based on a false image.
1.4 _ China and the West: an uneasy relationship
In principle, the EU tries to maintain its strategic autonomy and stay out of the confrontation between the US and China, but without betraying its shared values with the US (NZZ 2021b). Trade rules for the main growth region are likely to be heavily influenced by China. The Chinese government's propaganda agencies mistakenly see themselves in second place, just behind the United States and far ahead of Russia.
This was clearly reflected by the power and political reach of the military-industrial complex. The military arms race is therefore still at a significantly lower level than during the "hottest" periods of the Cold War. However, a colder relationship between the West and China in the future is possible, and the risk of a further weakening of the relationship must be planned economically, politically and, if necessary, militarily in terms of precautionary measures by the individual states and their companies.
1.5 _ Boundless friendship with Russia?
Ultimately, however, the importance of numerous comparisons in the media and the predictions derived from them about China's role in the world remains very limited. In this regard, the pressure should be very high for the EU to support a stronger policy of US containment against China in the future. While this view may be correct in the short and medium term, it is probably wrong given the possible irrational actions of Moscow and Beijing in the long term.
If China stays on the economic fast track, its own domestic market will | 45 and the growth of Africa – which is integrated through the BRI – could become relatively more important for Beijing than selling its products in the West. A closer alliance with Russia could be useful for China in the future, especially when it comes to access to raw materials, agricultural goods and ultimately cooperation on military projects. 45 One goal of Chinese economic policy – based on the current five-year plan – is to strengthen domestic market demand to reduce dependence on exports for growth (Bickenbach and Liu 2021).
2 _ Switzerland and China
2.1 _ A relationship with a long tradition
In addition, official dialogues on labor and employment conditions have been held within the framework of the free trade agreement since 2014. 2007 Switzerland recognizes China's market economy status 2016 Switzerland becomes a member of the Asian Infrastructure Investment Bank. However, this figure must be taken with caution given the low rate that Swiss exporters use | 47 of the free trade agreement.
The low rate of FTA use is particularly due to the fact that traded goods must comply with rules of origin. Thus, the administrative burden associated with the use of the FTA would be simplified and certain tariffs would be further reduced. Moreover, there is a risk of politicization of the control procedure, as the Federal Council pointed out in 2020.
2.2 _ More intensive discussion of values in foreign trade
Even if the human rights dialogue is currently suspended, Switzerland can try to bring China back to the table in the context of the institutionalized dialogue on the FTA. The political conception of neutrality, on the other hand, requires a general equality of distance from the parties to the conflict (Tribelhorn). As a rule, Switzerland interprets its neutrality policy very narrowly; it is almost like a policy of non-interference (Rühli und Rogenmoser For example, in the case of the Paris Climate Agreement or the ILO Convention on Labor and Social Standards, the associated multilateral organizations cannot force any country to comply with international obligations who signed it.
In response to the concerns of these groups, the Federal Council felt compelled to take an explicit position and published its China Strategy on 19 March 2021 (EDA 2021). The Federal Council refers directly to the authoritarian tendencies, oppression of minorities and general deterioration of the human rights situation in the People's Republic (Häfliger 2021). In addition to the China strategy, there are follow-up strategies for the Middle East and North Africa (Mena), for sub-Saharan Africa and for the Americas (EDA 2022c).
2.3 _ How should Switzerland position itself?
The review of the development of Swiss goods exports so far allows for two conclusions: growth rates with the Indo-Pacific region and the USA are significantly higher than with the EU, but the difference between them and the EU is still large (cf. Figure 9). A rough forecast, subject to very simplistic assumptions (constant growth in Swiss exports per trading partner), suggests that by 2050, the US could exceed – if only just – the EU's share of Swiss exports. If Swiss exports grew at the same rate as in the last 20 years, the EU would still be one of Switzerland's most important trading partners in 2050, after the US but ahead of China.
If the Swiss export shares of the respective GDP were to remain constant and develop according to PwC's forecasts, the EU would by far remain Switzerland's most important trading partner in 2050. For the forecast in Figure 10a, it is assumed for the sake of simplicity that Swiss exports to the respective countries will continue to to grow continuously in the future at the average growth rate of the past 20 years. In Figure 10b, a different calculation is made: The share of Swiss exports – measured in terms of the GDP of the buyer country – is kept constant.
China (including Hong Kong) is now Switzerland's third largest trading partner, the US and the EU are more important and will probably remain so for the next thirty years - despite the higher growth rates in the People's Republic.
3.1 _ Low pressure: “Pragmatism”
Switzerland's neutrality and sovereignty would be formally preserved in the best possible way. That is not to say that Switzerland cannot make progress in the heat of geopolitical tensions. Even today, the small city-state is called “the Switzerland of Asia” (Ruehl 2020) and many describe Singapore as a kind of model for Switzerland (Schwarz et al. 2014).
Political rights and civil liberties in the Republic of Singapore are severely restricted (Freedom House 2022). While Singapore occupies 88th place in the international freedom ranking, Switzerland is in first place (Vásquez et al. 2021). Singapore's "blindness" to China's actions in the South China Sea or its oppression of the Uyghurs, for example, is not an option for Switzerland.
3.2 _ Medium pressure: “Autonomous implementation of foreign regulation”
The economic impact of Switzerland joining the EU is likely to depend on the degree of integration. 63 On the other hand, with each level of integration, the conditions for access to the EU internal market will improve, and bilateral relations between Switzerland and the EU will be strengthened. This will be particularly beneficial in light of the fact that the EU - just like the USA (cf. Chapter 1) - is increasingly localizing many production processes (rehoming) and thereby creating new procurement and trade opportunities for Switzerland.
Thus, an adjusted relationship with the EU would constitute a solid basis for reducing economic dependence on China. Since the EU is an association of states, it can only act in the areas for which it is authorized by its member states. Therefore, Switzerland will have to dismantle its FTA network and adopt the EU's FTAs.
3.3 _ High pressure: “Closing ranks in the West”
To cushion the fallout from largely frozen relations with China, Bern should seek economic solidarity with the US. The US has been the largest foreign investor in Switzerland for more than a decade (SNB 2022a) and has been the main destination for Swiss exports since 2021, replacing perennial number one Germany (BAZG 2022). 69 According to one analysis, concluding a free trade agreement with the US would create 13,500 new jobs in Switzerland over the next five years as a result of intensified trade in goods (Dümmler and Anthamatten 2019).
In addition to material advantages, this would increase legal certainty for Swiss companies when trading with the US and provide a strategic advantage over foreign competitors. Although Switzerland's neutrality would continue to be legally preserved, its political form (cf. Chapter 2.2) would be strongly influenced by US orientation. On the other hand, in the event of a military threat to Switzerland – or, more realistically, to Europe as a whole – aligning with the US could gain the necessary political support.
3.4 _ Conclusion
