Forging win-win relations: Swiss Finance Minister Eveline Widmer-Schlumpf and Zhou Xiaochua. (

by Lady Michelle-Jennifer Santos, Chief Visionary Founder & Owner

July 7, 2014 (TSR) – Finance Minister Eveline Widmer-Schlumpf and China’s central bank governor, Zhou Xiaochuan, discussed Swiss plans in becoming a renminbi hub to assist its rise as an international reserve currency at a recent bilateral talks in Switzerland. Efforts are under way that would eventually lead to the establishment of a renminbi-Swiss franc direct swap line, bypassing U.S. dollar, according to the Swiss State Secretariat for International Financial Matters.

Renminbi is the name of China’s official currency – the units are known as yuan. Global renminbi (RMB) transactions are gathering pace and the currency is emerging as an international reserve currency competing with the dollar, euro and British pound.

Forging win-win relations: Swiss Finance Minister Eveline Widmer-Schlumpf and Zhou Xiaochua. (
Forging win-win relations: Swiss Finance Minister Eveline Widmer-Schlumpf and Zhou Xiaochua. (

In December 2012, the Swiss government officially announced its intention to become a renminbi hub, joining the likes of Britain, Canada, Germany and France in trying to woo Beijing. Swiss banks very strongly support the move, said the Swiss Bankers Association (SBA) in a statement.

An initial financial dialogue between Switzerland and China was held in Shanghai in December 2013. The second meeting between the authorities took place on June 26 in Bern, and on June 27 in Zurich a roundtable meeting was held for financial sector leaders and government authorities from the two countries. Widmer-Schlumpf was accompanied by Swiss National Bank Chairman Thomas Jordan in Zurich.

The focal point of the recent meeting in Bern was the internationalisation of the Chinese currency and the enhanced role of the Swiss financial centre as a renminbi hub. The Swiss authorities are making every effort to provide the necessary framework conditions.

In light of the market developments, the two sides agree to work together to explore the possibility of establishing an RQFII (Renminbi Qualified Foreign Institutional Investor) scheme and a renminbi clearing solution in Switzerland. The RQFII scheme enables investments in China’s financial market to be made directly in the Chinese currency.

During their bilateral talks, Finance Minister Eveline Widmer-Schlumpf and Swiss National Bank Chairman Thomas Jordan met with China’s central bank governor Zhou Xiaochuan. The authorities confirmed the will of collaboration in the field of renminbi internationalisation and agreed to take the necessary steps and hold another financial dialogue in China in the coming months.

The attendees at the meeting made it clear that Swiss banks would welcome Chinese banks in Switzerland and that the Swiss authorities would be open to considering possible applications by Chinese banks.

Swiss banks are greatly in favour of a currency agreement between the Swiss National Bank (SNB) and the People’s Bank of China, and thus for clearings through a Chinese bank based in Switzerland, the SBA statement said.


“An international swap line for the Chinese and Swiss currencies would be very welcome. It would assure liquidity for a Swiss-based Chinese clearing bank and it would increase the trust of market participants. Corporations and small and medium enterprises in Switzerland would benefit from greater proximity and operations in their own time zone,” said Patrick Odier, Chairman of the Board of Directors of the SBA, in the communiqué.

“In short, Switzerland as a renminbi hub is a win-win situation for both China and Switzerland.”

Chen Yuannian, Secretary General of the China Banking Association (CBA), said: “The Swiss Financial Center has expanded renminbi business extensively, serving clients in China, Switzerland and elsewhere in the world. This is favourable for not only the development of Swiss enterprises but also for the internationalisation of the renminbi”.

The SBA and the CBA have signed a memorandum of understanding as a “sign of their mutual understanding and willingness to proceed on the chosen path”, according to the SBA.

Swiss-Chinese Trade Deal Officially takes Effect

In general, the economic ties between Switzerland and China have been increasing.  A free trade agreement was signed by the two countries in 2013 and entered into force on July 1, 2014 to which Economics Minister Johann Schneider-Ammann and a high-ranking Chinese government delegation have recently celebrated.

The festivities took place simultaneously at the Rhine port of Basel and in Beijing.

The accord, signed last July, improves mutual market access for goods and services, and together with a bilateral agreement on labour and employment, will contribute to both countries’ long-term economic of development.

The economics ministry said the deal is the most important free trade agreement for Switzerland’s export industry since the 1972 accord with the European Union.

China is the third most important trade partner for Switzerland after the EU and the US. Trade volume with China reached CHF20 billion ($22.5 billion) last year, according to a officials.

Switzerland’s pharmaceutical, chemical and biotech industries said the deal was a crucial step to improve the competitive edge of Swiss companies.

However, the non-governmental Society for Threatened Peoples has protested against safeguards in the agreement for the respect of human rights. Another NGO, the Berne Declaration, staged a demonstration in Bern that day.

The financial dialogue, the agreement negotiated on free trade which came into force on July 1, 2014, and the revised double taxation agreement will help to strengthen economic and financial relations and to establish Switzerland as a hub for renminbi transactions.

The Swiss delegation for the financial dialogue was led by the State Secretariat for International Financial Matters (SIF) and comprised representatives of the Swiss National Bank (SNB), the Swiss Financial Market Supervisory Authority (FINMA) and the Federal Department of Foreign Affairs (FDFA). The Chinese delegation was made up of representatives of its central bank and financial market supervisory authority. Both delegations also took part in the round-table event in Zurich.



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