Sino-Swiss Business News
The reinsurance industry can play a leading role in tackling climate change and in supporting green transformation to improve climate resilience, according to Christian Mumenthaler, CEO of Swiss Re Group. In 2020, the devastating effects in extreme weather with an increase in secondary perils, such as severe storms and wildfires, contributed to USD 76 billion in global insured losses from natural catastrophes, Mumenthaler said. On top of this, the world has had to face the unprecedented challenges of the COVID-19 pandemic, however, China has been one of the few countries able to weather the storm and get back to growth. “When we think about the Chinese market, we continue to think it is one of the most exciting markets in the world with very good prospects, and we have high confidence in China and its recovery,” Mumenthaler said in a video link to the China Development Forum 2021 held from March 20 to 22 in Beijing. Swiss Re has participated in the CDF since 2012, and this year focused on the topic of green transformation centering around the 14th Five-Year Plan (2021-25).
Credit Suisse will look to further accelerate its expansion plans in mainland China with plans to triple its headcount in the market over the next three years. “We are planning to more than triple our presence in term of headcount in China over the next three years and look forward to strengthening our position,” said Credit Suisse chief executive Thomas Gottstein during a panel discussion at the Beijing-based China Development Forum. In addition to increased headcount and also plans to take full control of its securities venture over the next 12 months after obtaining a majority stake last year, the bank will also look to expand its offering. It is planning to apply for a banking license in order for its branch to enhance its offering across private and investment banking. This is a significantly accelerated plan compared to August last year when the bank said it would look to double headcount over the next five years.
As China aims to grow its economy by over 6% in 2021, global industrial companies are pinning more hopes on the country’s market to shore up their competitiveness. Among them is ABB Ltd., a Swiss power and automation company. Implementing an “in China, for China and the world” strategy, the firm has put China in the front and center of innovation over the past decade. ABB believes China will reach its 2060 carbon neutrality goal by taking the innovation and technology route. CGTN’s Michael Wang spoke with Morten Wierod, president of motion business at ABB, on the changes he has witnessed and the outlook for China’s industrial landscape. Morten Wierod stated “Overall we’re doing very well in the Chinese market, not only as ABB, but also as moreover motion business, with a good growth in the forth quarter more than 20 percent for the overall business. So, there we see that the trend of higher energy efficiency and the need for productivity. This is driving our business and makes us very optimistic about the future, as we see great growth potential in China for this industry in the general, and for ABB in special.”
With China aiming to achieve carbon neutral by 2060 and further improve the production efficiency in its manufacturing sector, ABB Group, the Swiss industrial conglomerate, plans to seize more market share as the country demand for smart urban infrastructure and digital electrical solutions will continue to rise during its 14th Five-Year Plan (2021-25) period. China’s drive toward high-tech, sustainable cities, transportation, energy supply goes hand in hand with ABB business model and the company is playing a key part in the tangible growth of the Belt and Road Initiative, said Morten Wierod, president of ABB Motion. “Industrial energy efficiency, more than any other challenge, has the single greatest capacity for combating the climate emergency. It is essentially the world’s invisible climate solution,” said Wierod. “By far the biggest impact we can have in reducing greenhouse gas emissions is through our technologies, which reduce energy use in industry, buildings and transport – sectors that together account for nearly three-quarters of global energy consumption,” he said.
Some global banks including Credit Suisse are purportedly relocating bankers from Hong Kong to the Chinese mainland, in an effort to sharpen their competitive edge in the world’s second-largest economy which is spinning along in a sweeping push for financial deregulation. Credit Suisse lately relocated three directors and four more junior staff to the mainland, Bloomberg reported, citing unidentified people familiar with the matter. Another Swiss bank UBS is “in the process of shifting several managing directors.” And, JPMorgan recently relocated Houston Huang, who oversaw deal making for the US bank from Hong Kong, to Shanghai after appointing Huang as the head of investment banking for its securities joint venture in the mainland, said the report. “UBS has no plans systematically to relocate employees from Hong Kong to the mainland. However, we seek to maximize flexibility and will continue to relocate small numbers of personnel both to and from the mainland in line with the needs of the business,” a UBS spokesperson told the Global Times.
According to annual figuresExternal link released on Wednesday, the Swiss MEM industry saw sales drop by 9.8% and incoming orders by 6.5% in 2020. The situation started to improve in the second half of the year with new orders in the fourth quarter of 2020 returning to the previous year’s level. This was thanks in large part to trade with China, which recovered quickly after the shutdown in the first quarter. “The Swiss industrial companies that do business locally or with exports with China were able to benefit quickly,” said Martin Hirzel, President of the Swissmem, manufacturing industry association, in an interviewExternal link with Swiss public television SRF. The Swiss industrial sector has boosted business with China with the help of the free trade agreement in force since 2014 – the first signed between China and a European country. The sector now exports four times more to China than two decades ago. Exports to the country making up 7% of all Swiss MEM exports.
Kuehne Nagel will be acquiring Apex International Corporation, one of Asia’s leading freight forwarders, especially in the transpacific and intra-Asia. At this point, both parties have agreed to not disclose any further transaction details. Detlef Trefzger, CEO of Kuehne Nagel International AG, said, “The combination of Apex and Kuehne Nagel provides us with an opportunity to offer our customers a compelling proposition in the competitive Asian logistics industry, especially in e-commerce fulfilment, hi-tech and e-mobility. We are looking forward to welcoming the Apex colleagues to the Kuehne Nagel family.” Following closing of the transaction, a minor stake of Apex shares is to remain with the experienced and entrepreneurial management of Apex. Furthermore, the company will then continue to operate separately within the Kuehne Nagel Group. Tony Song, chairman of the board of directors and CEO of Apex, added, “With Kuehne Nagel, we have found a strategic shareholder and logistics group with more than 130 years of heritage. We are sure that with this transaction, we will be able to add value for our customers’ supply chains and expand our global logistics network. We will complement Kuehne Nagel’s existing global air logistics team while offering our management and key talents unique career opportunities.”
The president of the Swiss-Chinese Chamber of Commerce (SCCC) said that Swiss companies would stand to benefit from China becoming the European Union’s (EU) top trading partner. “With 2021 being the year of the coronavirus pandemic recovery, I expect some statistics to change again,” Felix Sutter, who has been the chamber’s president since 2015, told Xinhua. “In 2020 the personal protective equipment (PPE) industry had an impact on statistics. In 2021 the pharmaceutical industries will have an oversized impact as well,” Sutter said, “Furthermore, many affected SME’s (small and medium-sized enterprises) and MNC’s (multinational companies) began to address supply chain challenges and may start to source regionally rather than from far away places.” China overtook the United States to become the EU’s top trading partner for the first time last year, the EU’s statistical office Eurostat said. Sutter said that Switzerland would be ideally positioned economically and geographically as “a landing place for Chinese organizations.” Since 2010, China has been Switzerland’s biggest trading partner in Asia and its third largest globally after the EU and the U.S. The two countries signed a free trade agreement (FTA) that entered into force on July 1, 2014.
Bühler on February 13 reported EBIT of CHF 146 million (USD 163.6 million) for 2020 compared to CHF 248 million a year ago. Turnover was CHF 2.7 billion, down 17.0% from CHF 3.3 billion. The 2020 figures are impacted by the development of currency exchange rates, specifically of the Chinese yuan, euro, and US dollar against the Swiss franc. The Group gained financial strength, with equity ratio reaching 44.2% (+1.4 percentage points) and net liquidity soaring to CHF 749 million (+66.8%). Turnover was CHF 2.7 billion (-17.0%), with order intake amounting to CHF 2.6 billion (-16.7%). Along with the divergent course of Bühler’s businesses, there was also a shift in regional development towards Asia. While all markets reported lower volumes, Bühler Asia managed to be stable driven by the strong growth of Bühler’s business in China. Order intake in China rose sharply by 15% for the full year. Regarding turnover, Asia now makes up 35% (previous year: 31%), Europe 30% (30%), North America 16% (16%), Middle East & Africa 11% (14%), South America 5% (6%), and South Asia 3% (3%). Despite the challenging environment, Bühler continued to execute its innovation roadmap, launching 86 new products and solutions.
Clariant, a focused, sustainable and innovative specialty chemical company, announced that it has signed a license agreement with Harbin Hulan Sino-Dan Jianye Bio-Energy, a Chinese green energy company for its sunliquid® cellulosic ethanol technology. Harbin Hulan Sino-Dan Jianye Bio-Energy, a subsidiary of the Sino-Dan Jianye Group was formed in the early 2010s and has been involved in the second generation (2G) biofuels business and research for almost a decade making them one of the frontrunners in this field in China. The project development and plant operation will be performed by Harbin Hulan Sino-Dan Jianye Bio-Energy at a corn-rich greenfield site near Harbin City in the Heilongjiang Province, in Northeast China, utilizing available land and existing infrastructure owned by the Sino-Dan Jianye Group. The annual production capacity is planned to be 25,000 tons of cellulosic ethanol, processing more than 125,000 tons of locally sourced corn stover, making it one of the first 2G biofuel plants to be built in the Heilongjiang Province so far. The project is comprised of a license for a basic sunliquid® engineering package, the provision of technical services, as well as the supply of starter cultures from Clariant’s proprietary enzyme and yeast platform to process Harbin Hulan Sino-Dan Jianye Bio-Energy’s feedstock into cellulosic ethanol. Detailed project evaluations and preparations for the engineering phase are well underway.