Leuthard, who ended a six-day working visit to China on Sunday, had said that the feasibility study which began in 2009 had covered all potential areas of trade. Sun Xiaolan, assistant to the Commerce Department of the Swiss Embassy to China said on Monday the FTA talks had officially kicked off.

Although Sun did not disclose the detail of the initial talks but confirmed that Switzerland would soon be the first European country to conclude an FTA with China, as it was with Japan in 2009. Switzerland has the distinction of becoming one of the first Western countries to establish diplomatic relations with China, today to transform itself into a major trading partner from the region.

The top Chinese legislator Wu Bangguo, while he met Leuthard had said the two nations could explore new ways to better combine Swiss technology with the Chinese market. Similarly, the Chinese Commerce Minister Chen Deming said the country had ‘enormous demand’ for Swiss products relating to environmental protection, energy conservation and emissions reduction.

Switzerland is China’s ninth largest European trade partner, while China is Switzerland’s fourth largest global trade partner. In the first half of this year, bilateral trade jumped 127 percent, and China’s imports from Switzerland increased 180 percent compared to the same time last year.

According to the Ministry of Commerce, bilateral trade between China and Switzerland topped $11.3bn in 2008, and slightly dropped to $10.18bn in 2009, with $5.28bn of Swiss exports and $4.9bn imports from China.

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Along with changes in trade policies which would help exports from developing countries the Chinese manufacturers also will get incentives to maintain price competitiveness in the global markets. China’s exports, which experienced robust growth of more than 25 percent before 2008, dropped by 16 percent last year.

Chinese Commerce Minister Chen Deming at the sidelines of the meet stated all China’s financial policies, including its devalued status of yuan/renminbi, were part of China’s stimulus package comprehensively designed to counter global economic meltdown. He also defended the subsidies, claiming the stimulus incentives “abide by the rule of the World Trade Organisation and bear no protectionism.”

While announcing the policy statement, China admitted that it would “eliminate unreasonable restrictions” on the import front. A re-look at this policy comes after repeated complaints from India to its Chinese counterparts at every platform they met. The policy statement said “imports from developing countries will be expanded so as to satisfy domestic demand on the one hand, and promote mutual benefits and common development on the other.”

Zhang Zhigang, a member of the CPPCC said that if the country wanted to encourage consumption, exports were “vital”. Likewise, Chen said that export-related sectors provide at least 90mn jobs – about 7 percent of the national population – and therefore affect consumption.

Barring surprises, most members during the meet felt export was key to China’s economy indicating the most censured yuan’s low currency value that is tied to the Chinese export advantage would be moreover the same for the coming months until it gets even with its early 2008 export growth. Chen statement corroborates that fact as he said “although yuan faces appreciation pressure, China still plans to keep the exchange rate of yuan stable”.

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