The China Venture

countries like Germany employ dedicated offices like the "Delegiertenbüro der deutschen
Wirtschaft" to fulfil these tasks - in special cases their services are also open to Swiss SME's.
3.2.10.2 How can Swiss Banks Function as Partners?
The Swiss banks have been very active in the recent years in working with both exporters and
foreign importers of Swiss goods and services through the financing of Swiss exports and the
provision of other banking services. However, the role of Swiss banks as partners for other
banking activities except the above mentioned presently is somewhat ambiguous: although
they provide a certain infrastructure with their representative offices in major cities in China,
they do not seem to be too much interested in supporting SME's with financial funds to enter
the Chinese market.
This attitude is very similar to their behaviour on the Swiss domestic market, where SME's
find themselves in difficulties raising funds for investment into their "risky" companies,
whereas larger industrial units have by far easier access to capital. The authors are aware of
the fact that an engagement with an SME does not give as fast a payback to the banks as other
investments. However, it might be worthwhile to rethink the actual practices as a long term
engagement may bring significant revenues to the banks in future.
There is a certa in discrepancy in the fact that, once the SME's are already established in
China, Swiss banks are willing to assist in daily banking life by having connections to
Chinese banks and other business partners using their own guanxi to solve problems like
delayed payments, etc. 108 So far Swiss banks are not allowed to trade in Renminbi, so that in
any case the services of a Chinese bank have to be used.
3.2.10.3 Which Fund Raising Strategies should SME's follow for Investment
in China?
Following the present situation of limited availability of Swiss Government funding and high
"risk-consciousness" of Swiss banks, an SME has the following options or strategies to
successfully setting up business in China by providing enough funds:
108 Source: Mr. Gu Qi (Deputy Representative, Shanghai Representative Office of SBC Warburg Dillon
Read), 1997.
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