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Chinese and other foreign corporations should no longer be allowed to freely buy Swiss companies. First, the federal government would have to check whether the takeover is sensitive to Switzerland’s security. Parliament wants this “Lex China”, but the Federal Council considers it to be harmful to the economy.
The Basel-based agrochemical group Syngenta belongs to a Chinese state-owned company, while the former Swiss aircraft maintenance company SR Technics is owned by a Chinese mega-corporation that is not very transparent. Chinese, as well as other foreign corporations, would specifically buy into important sectors, says the middle of the Council of States, Beat Rieder. Worldwide and in Switzerland.
“The worst case is that we become more and more dependent on foreign countries.” Switzerland is already heavily dependent on China and other foreign-controlled companies that take over companies that are central to Switzerland’s supply.
Legend:
Middle Council of States Beat Rieder at the spring session of the federal councils in Bern.
KEYSTONE/Alessandro della Valle
Rieder is the political father of «Lex China». He has convinced parliament that a permit is required when foreign corporations buy important Swiss companies. The Federal Council must cast the authorization requirement in concrete legal texts.
Federal Council against authorization requirement
But the Federal Council does not believe in the idea. According to the arguments, the permit requirement discourages investors, endangers prosperity and is unnecessary. “Switzerland as an investment location would be weakened,” writes the responsible State Secretariat for Economic Affairs Seco.
The focus should be placed on the most safety-critical acquisitions. These are takeovers by state-controlled investors, which could be politically motivated.
Last year, the Federal Council reluctantly made an initial implementation proposal and submitted it to associations, cantons and parties. Based on the feedback, he literally slashed the «Lex China». Only in the case of takeovers in the armaments, electricity, health or telecommunications sectors should the state check whether there is a threat of espionage or whether the country would become too dependent on the foreign buyer – but only if the buyer is a state or state-controlled foreign company .
The Seco justifies the step backwards on behalf of the Federal Council. «The focus should be placed on the most safety-critical acquisitions. These are takeovers by state-controlled investors, which could be politically motivated.”
Rieder criticizes the Federal Council’s regression
Beat Rieder isn’t at all satisfied with only checking company acquisitions by state-controlled corporations. That is naive. “In certain states, you can’t make that distinction between private enterprise and government control. You have companies that are of a certain size in a country and cannot make foreign investments without appropriate clarifications with the state.” There is simply this state capitalism that pursues influence abroad.
Business is interested in quick money and quick deals. This is not in the interests of the population and the country.
The Federal Council, on the other hand, justifies its step backwards with the consultation at the public hearing last year. “The assessment that such a restriction on investments would be economically harmful was shared by the majority in the consultation.”
The Federal Council is listening too much to the economy, criticizes Rieder. «The economy is interested in quick money, in quick deals. This is not in the interest of the population and the country.”
The path from an idea to its implementation is long in Switzerland. The matter comes back to Parliament. Beat Rieder is confident that a majority there will tighten the “Lex China” again.