Anti-monopoly actions unlikely to affect Swiss companies

If China's anti-monopoly regulations follow international norms, it would not affect Swiss companies too much, the head of the nonprofit organization Swiss Center Shanghai said.

Managing Director Nicolas Musy of the center said that almost all the Swiss companies active in China are also active in other key markets including the United States.

Musy said that the Swiss companies will not be affected much if China complies with international anti-monopoly practices.

His words follow various companies coming under the spotlight in recent months as China intensifies its efforts to crack down on monopolies.

Chinese authorities have said the law is being applied to both domestic and foreign firms, with the aim of protecting consumers.

China and Switzerland have seen a decade of growth in bilateral trade and investment. Many well-known Swiss companies, such as food and beverage company Nestle, pharmaceutical company Novartis AG, and elevator and escalator manufacturer Schindler Group, have set up production and research and development centers in China.

Musy also revealed that Swiss companies remain the most confident about their businesses in China in the next five years, and almost two-thirds of Swiss companies plan to increase investments in the country.

Sales and profits of Swiss companies in China have continued to grow this year. Expectations of annual profit increase have more than doubled since 2012, according to the Business in China 2014 survey recently conducted by the Swiss Center Shanghai and the China Europe International Business School.

"In 2014, Swiss firms in China expect, on average, a 5.6 percent growth in profit, up from 3.5 percent in 2013 and 2.6 percent in 2012," said Musy.

"Swiss and European SMEs in China are now more than ever seeing higher percentages of global sales generated in China," said Musy.

In the survey, companies with less than 300 employees worldwide were counted as SMEs. "On average, all companies see their sales and profits improving in 2014," Musy said. "Respondents from SMEs see their profits increasing significantly faster than their colleagues from larger firms."

The Business in China 2014 survey is based on the responses from more than 1,000 companies and is the only survey that collect responses from Chinese as well as foreign companies in China. The survey had responses from 104 Swiss firms in China.

"A possible reason for the strong success of SMEs is probably an environment that has a lower level of competition," Musy said.

"This lower level of competition and challenges could well be due to the SMEs' very nature of doing business: focusing on niches."

Based on the profit and revenue picture, 64 percent of the Swiss companies plan to increase investment in China in 2014 and more than half of them consider China among the top three investment destinations, the survey found.

The key management challenge for international companies in China remains finding and retaining human resources, Musy said.

Lack of understanding and support from the head offices is the second most important management challenge for international companies and an issue for 30 percent of them.

The survey also found that international companies in China now perceive local private players as their greatest competitors, a marked shift from the past years when respondents said international companies posed the greatest competition.

Founded in 2000, Swiss Center Shanghai is the largest cluster of Swiss businesses in Asia, with experience in business setup, expansion and operations management.