Sino-Swiss relations: a history of friendship

Dr. Lukas Sigrist

Secretary General

Swiss Textile Machinery

Swissmem, Zurich/Switzerland

 

 

 

Relations between China and Switzerland are long established and full of tradition. Today both countries enjoy lively exchanges at both the cultural and economic level. China has not only become one of the most important export markets for Swiss textile machinery manufacturers, but also the most attractive place to invest in local operations. Some 40 Swiss exhibitors are greatly looking forward to ITMA ASIA + CITME2008.

 

 

 

 

After the founding of the People’s Republic of China in 1950, Switzerland was one of the first countries in the world to officially recognise the new republic, a historical landmark that was celebrated 50 years later at CITME 2000 with an anniversary “fashion students contest”. It is worth mentioning too that the first official Swiss business delegation to visit modern China in 1979 consisted of representatives of the textile machinery industry.

 

With China’s emergence as a powerhouse of the global textile industry, Swiss textile machinery has acquired great popularity among Chinese textile manufacturers. Starting at just 3-4% of overall volume in the late 1990s, Swiss exports grew rapidly to peak at about 20% of total textile machinery shipments in 2003 to 2004.

 

 

Driven by the increasing global importance of China as a textile manufacturer and the desire to be closer to this market, Swiss textile machinery manufacturers were keen to establish their own operations in China and began to invest in local production or assembly lines. In time all major Swiss textile machinery manufacturers set up their own manufacturing or assembly plants in China. For this reason, direct Swiss exports to China started to decrease after 2005, accounting for some 15% of worldwide exports. Today, the amount of in China built Swiss machinery being supplied to the Chinese textile mills is on the rise. Most companies expect this tendency to continue, as the quality of both the machines and after-sales services will continue to rise with the ongoing training of the local workforce, growing experience and greater professional expertise.

 

 

For centuries, “Made in Switzerland” has been considered a premium brand. Swiss textile machinery is the first choice for most internationally successful textile mills. A key factor in explaining this success lies in the Swiss manufacturers’ ability to transform innovative concepts into marketable products.

In addition, the Swiss make it their mission to anticipate customers' needs and to provide them with state-of-the-art high-performance solutions that are in most cases a much better alternative to low-priced general-purpose installations. What counts in an increasingly demanding world market are satisfied customers with competitive products.

 

 

The Swiss are well aware of the great importance of the Chinese market. The dynamics of the Chinese textile industry are certainly not simply a “nine-day wonder”, but are based on a forward-looking strategy backed by a strong workforce and a supportive economic policy. There can be no doubt, therefore, that the Swiss are keen to ensure a continuing, mutually beneficial partnership. The direct investments by Swiss manufacturers referred to above effectively illustrate their confidence in the industry’s future. This trend is certainly set to continue and the Swiss will further bolster their Chinese operations.

 

 

A growing challenge facing Swiss textile machinery manufacturers at present is the increasing competence and expertise of local machinery suppliers. With the steady growth in competition between domestic and international machinery manufacturers over recent years, the setting-up of an effective IPR protection scheme has become a widely discussed issue.

 

However, the Swiss companies’ mission reaches far beyond simply supplying machinery. What counts in a competitive market are economically realistic solutions; solutions that unite engineering and know-how with services such as training, after-sales support, maintenance and spare parts availability – features that are synonymous with Swiss quality.

 

 

At the beginning of the post-MFA quota regime, China was the undisputed leader in exports of textiles and apparel. Other Asian countries followed, first and foremost India. In the years preceding the phasing out of the quota in particular, China was also the biggest purchaser of Swiss textile machinery. It was during this period that most Swiss machinery manufacturers invested in their own production facilities in China.

 

As incomes rise in Asia in general and China in particular, the demand for higher quality products is constantly increasing – a trend that ultimately requires investments in new production facilities. Moreover, the whole world is now having to contend with rising energy costs, more expensive raw materials and the ongoing decline in value of the US dollar. In addition, increasing environmental awareness necessitates even more investments in top class production machinery. Finally, we are also seeing a rise in demand for technical textiles, particularly in Europe, which again entails investments in even more sophisticated machinery. All these factors may eventually jeopardise the competitiveness of some players and lead to new challenges.

 

The following tables are a largely accurate reflection of current trends.

 

Tables I & II show Swiss exports of textile machinery in 2007.

 

Table III shows the development of Swiss exports to China from 1998 to 2007, charting the growing impact of Swiss production within China.

 

Table IV gives overall Swiss export figures for the last decade. Given the speed at which production facilities have been set up in China, these figures have been remarkably stable.

 

Table V indicates a concentration of Swiss exports into three main markets.

 

Table VI illustrates the shift in markets over the last decade.

 

 

 

Some 40 Swiss exhibitors are looking forward to the biggest and most important show in the region. They are prepared and ready to demonstrate their competence and leadership. On an area of 5,300 m² they will be exhibiting a wealth of up-to-date technology. Their expertise in spinning, texturing, weaving, embroidery, dyeing, printing and finishing as well as in control systems and environmental technology will be both a yardstick and point of reference for today’s textile industry. Customers can rest assured that their Swiss partners will do their utmost to maximise the mutual benefits of cooperation by providing future-ready equipment and services. Switzerland’s textile machinery manufacturers have high expectations of ITMA ASIA + CITME 2008. They are greatly looking forward to a successful event.