Weiyun Gong's job is not easy. The branch manager of China Construction Bank in Zurich has the task of building bridges between the People's Republic and Switzerland. The manager spoke to finews.com about his mission, the panic surrounding Credit Suisse and the distribution of Ricola sweets in the branch network of the state institution.
«We build bridges between China and Switzerland» is the motto of the China Construction Bank (CCB), which adorns a box of Ricola sweets on the table in front of Weiyun Gong, CCB's branch manager in Zurich. The same box can be found in Shanghai, where it is stacked in the chic consulting rooms for CCB's private bank clients.
That is undoubtedly one of Gong's successes. Building bridges to Switzerland, on the other hand, is something of a challenge these days, as the gap between the two geopolitical blocs is widening. Switzerland has to tread between the US and China, the world's two largest economies that don't exactly see eye to eye.
With the reactions to former Federal Councilor Ueli Maurer's meeting with the Chinese ambassador and Social Democratic Party's National Councilor Fabian Molina's «Taiwan motion,» the Swiss highwire balancing act between the two has reached a new level.
«It would be wonderful if you were transferred here»
That worries local bankers, too. Some institutions are beginning to game out scenarios of US sanctions against Chinese clients. This comes just as China is beginning to open up as the pandemic restrictions ease, and Western companies are hoping for a new boost to business in the Far East.
For Gong, it's clear the global economy can no longer be separated from the Chinese economy. «The hundreds of millions of Chinese consumers alone are a market the world can't do without,» the CCB branch manager says. Accordingly, he is not very worried about a widening of tensions between his home country and the US, he tells finews.com in an interview.
Gong has worked for the world's second-largest bank for more than 30 years. After graduating, he joined CCB's Shanghai branch in 1998, becoming involved in the foreign finance business. After 25 years of service, he then received a mandate from the state bank's headquarters to set up a branch in Zurich. He was not the only one who relished the challenge. The Gong couple had traveled to Switzerland years earlier, he recalls. «My wife said: what a beautiful country! It would be wonderful if you were transferred here.»
High Hopes Around the Hub
And so it came to pass in 2015. Gong, who had never worked abroad before, led the team preparing to launch in Switzerland. The following year, he was able to open the new Zurich location to much fanfare. At the time banking veteran Holger Demuth was also aboard, but the the Swiss face of CCB, who worked with Gong as the operational head (CFO and COO), recently turned his back on the branch. The search for Demuth's successor is progressing well, Gong assures. «We are particularly looking for people who not only understand the Swiss market but are also familiar with Asian business,» an ability, he says, that is in high demand, especially among Swiss corporate clients.
Part of the reason for the excitement surrounding the launch seven years ago was that CCB was the only institution to receive a license from the People's Bank of China, the Chinese central bank, to renminbi hubs in Switzerland. High hopes were attached to the opening, which has since died down. This is despite the fact that renminbi clearing has since reached a total volume of over one trillion Swiss francs. According to Gong, this corresponds to a market share of 20 percent in Switzerland.
Chinese Tourists Absent
In 2021 and 2022, volumes decreased slightly, the lower activity is due to the consequences of the Corona crisis, according to Gong. In addition to internationally active corporations, which represent the largest segment, renminbi clearing in Zurich is dependent on the flow of Chinese tourists, with this demand falling away due to the strict travel restrictions enacted in 2020.
Nevertheless, the head of CCB's branch believes the hub still has potential. In 2022, clearing volumes of 189 billion Swiss francs were still higher than in 2019, before the pandemic, Gong reports. And with the Chinese government's 5 percent growth target, demand will undoubtedly increase.
Masks During Corona
Even as the buzz of 2016 faded, Gong still feels supported by the federal government and local authorities in Zurich, with cooperation remaining surprisingly close, according to the manager. When the pandemic broke out, the Finance Department of the Canton of Zurich worked closely with CCB to arrange urgently needed supplies for contactor equipment in China through the bank. Central bankers from the two countries met repeatedly for exchanges at the CCB branch. The bank also maintains good relations with other Chinese companies in Switzerland.
As one of the first Chinese managers in Switzerland, Gong wants to pass on his experience to his compatriots so they can quickly integrate themselves and their company here, he explains. To this end, the banker also looks after the Chinese community outside of office hours, chairing the Association of Chinese Companies in Switzerland, which includes over 30 firms.
«More open and neutral than the US»
CCB offering banking services in this country could almost be dismissed as a minor matter, yet the service offerings are quite broad. They include commercial banking and business, payment services, and bridge financing for transactions. According to the bank, its clientele includes more than half of the largest Swiss corporations and four of the world's leading commodity traders.
The bank is also involved in the listing of depositary receipts (GDRs) on the SIX Swiss Exchange with increasing frequency in the past year. CCB acts as a depository for around half of the Chinese companies so far second-listed on SIX. The bank is doing its best to promote the instruments to Swiss investors which up to now have been virtually untraded in Switzerland. To this end, information events are also being held at the bank in Zurich. «Chinese companies perceive the Swiss financial market as more open and neutral than the US,» Gong says, estimating the pipeline for further SIX GDR listings at around 30 firms.
Credit Suisse Chinese Counterparties
While the branch doesn't disclose business figures, Gong lets slip that much of the income is reinvested to strengthen the balance sheet, and is pursuing a long-term policy on interest rate risks and refinancing.
The rescue of a major Swiss bank in CCB's immediate vicinity must have hit him all the harder, not least because he knows Credit Suisse employees and common customers, acknowledging the uncertainty is not good for business. CCB Switzerland received numerous calls from Chinese counterparties of the Swiss banks and he had to explain the situation. But he has praise for the swift intervention of the federal government and supervisors on March 19. "If they had not acted so resolutely, the whole world would have faced a big problem the following Monday."
Ricola Distribution
State-owned bank CCB is keen on a stable Swiss financial center, as the branch manager makes clear. «Switzerland is one of the most important financial centers in Europe,» Gong explains. And that is why constructive cooperation with Switzerland in terms of economic relations is an important concern for China, he says.
(Image: China Construction Bank)
To deepen cooperation, Gong's employer has also opened its own distribution channels to companies like Ricola. Via the bank's Internet portal and its huge network of branches, the major Chinese bank sells Ricola products in China. Gong hopes that this will help to make Swiss quality brands known in the People's Republic. And this, it may be assumed, will create further pillars for the bridge between the two distant markets that CCB is striving for.
