Swiss Chinese Investment Screening Law: Strategic Security or Paper Tiger?

Europe's neutral heart is finally putting up its defenses. The Swiss parliament recently passed legislation to screen Chinese investments in strategic industries for the first time. It's a move that marks a significant departure from Switzerland's long-standing open-door policy, though some argue the new rules don't go far enough.

Swiss Chinese Investment Screening Mechanics

Under the new framework, the government will have the authority to vet foreign takeovers in sectors critical to national security, such as energy, defense, and infrastructure. This shift follows years of pressure as China expanded its footprint in the Alpine nation. According to Reuters, the law aims to balance security concerns without scaring off essential foreign capital.

A Fragile Compromise Between Bern and Beijing

The legislation arrives despite efforts by Federal Minister Guy Parmelin to maintain a warm trade relationship. In January 2024, Switzerland and China signed a trade agreement near Bern, signaling cooperation. Critics now claim the screening law is too narrow, potentially allowing strategic assets to slip through the cracks while Bern tries to preserve its economic attractiveness.