Why should Swiss Startups look at China 2023

China has the manufacturing capability and an ultra-large-scale domestic market that offers Swiss deeptech startups a very particular set of opportunities. The sheer size of its population and the propensity toward new technologies would make any innovative companies excited just to think about how many changes they could bring about if they made it into China.

Interview with Felicia Wang, Startup Manager at Swissnex in China

March 23, 2023

 

Why should Swiss startups look at China upon internationalization?

China has the manufacturing capability and an ultra-large-scale domestic market which offers Swiss deeptech startups a very particular set of opportunities. By stepping into China’s dynamic innovation and entrepreneurial ecosystem, innovators can quickly transform their ideas into commercial products and services and often at a lower cost.

Despite its reputation as the world’s factory, China has been shifting its focus from quantitative growth to a more qualitative one. In 2022, China’s absolute spending on R&D is the second highest in the world and it ranks 11th in the Global Innovation Index 2022. The government’s 14th Five-Year Plan (2021-2025) prioritizes basic research and technology applications, favorable policies have been implemented in support of cutting-edge fields such as next-gen information technology, biotech, new materials, new energy and cleantech.

Furthermore, China has at its disposal a vast population that has undergone unprecedented amounts of changes and consequently has acquired an astonishing level of willingness to adopt and adapt to innovations, at a speed and scale that has met no peer. This is what makes China special when it comes to innovation, the sheer size of its population, and the propensity toward new technologies would make any innovative companies excited just to think about how many changes they could bring about if they made it into China.

 

So, what are the challenges?

Language and cultural barriers are important factors to consider upon entering China. The Chinese style of doing business may be different from what Swiss companies are used to, but the principle of supply and demand stays the same. And just as China boasts immense opportunities, there are significant challenges to overcome. Companies operating in China need to be extremely agile to stay competitive in the market and quickly adapt to shifts in market demand and new preferential policies.

Navigating the complex business regulations and bureaucracy can be daunting, while IP and transaction concerns pose potential obstacles for foreign startups looking to make inroads into Asia’s biggest economy.

 

How can Swissnex in China help?

Swissnex in China has been operating in this ultra-large-scale and complex market since 2008, and we have gathered in-depth market intelligence, network and resources to help Swiss startups survive and thrive. We are the primary point of entry and point of contact for Swiss startups when they come to the Chinese market. Throughout the years, we have offered tailored support, networking & matchmaking services, and acted as a cultural bridge for startups.

 

What is Swissnex in China's working focus this year?

As the world’s largest producer, importer and consumer of energy, and the biggest investor in renewable energy and cleantech, China’s energy sector bears the enormous responsibility of empowering the energy transition to renewable energy. In 2022, China invested four times as much as the US into renewable energy, with the former at $546 billion, and the latter at $141 billion. Solar and wind energy, electric vehicles and battery, fuel cell and hydrogen-related technology research and innovation are a growing focus. The Chinese government also formulated a mandate to fuel the transition of the country from carbon-intensive towards carbon neutrality by 2060.

Other focus areas of this year are in foodtech and biotech. Investment in the China agri-food sector reached 6 billion US dollars in 2020, a 66% year-on-year investment growth despite the toll the COVID-19 pandemic took on the economy. The agri-food sector is one of China’s fastest-growing industries. Another focus sector is the biotech sector. Regulatory reforms in the biotech sector, the emergence of biotech clusters all over the country, talent returning from overseas, and the opening of China’s capital markets have all played a part in enabling Chinese biopharma to emerge on the global innovation stage.

This year, Swissnex in China will organize the Energy and Environment Launchpad for startups in this sector throughout the year. The smart nutrition seminar will take place in May. We welcome you to stay tuned for more detailed information about our upcoming programs.