China Targets Swiss Start-Ups for Strategic Technology Acquisition Through Attractive Incentives

China has intensified its efforts to attract Swiss start-ups by offering seemingly generous incentives including interest-free funding, free office space for extended periods, accelerator programs, and a business-friendly regulatory environment. These offers aim to entice innovative Swiss companies to engage with China’s rapidly growing tech ecosystem.

However, historian Ariane Knüsel of the University of Fribourg, an expert on Sino-Western relations, cautions that the underlying goal is not genuine cooperation but technology transfer and eventual dominance in key strategic sectors. Knüsel, who has studied China’s approach to Western technology for years, explains that while China’s courting of Swiss start-ups is not new, it has evolved into more sophisticated and potentially hazardous forms.

Tracing back to the 1980s, China began systematically importing Western technology and know-how through high-tech zones, joint ventures, and technology parks. A pivotal moment came in 2015 with the launch of the “Made in China 2025” initiative, which set out to position Chinese companies as global leaders in ten strategic industrial sectors.

Knüsel emphasizes that China’s long-term ambition is to become a technological superpower by 2049. To achieve this, Beijing continues to rely on access to Western technology to bridge university research with industrial application.

The recruitment of Swiss talent is facilitated through a dense and well-organized network comprising venture capital firms, state-backed funds, incubators, and accelerators. Additionally, China employs talent programs that attract researchers with competitive salaries and state-of-the-art facilities. Foreign researchers, entrepreneurs, and students are actively targeted to participate in these initiatives.

Officially, these measures are presented as efforts to build economic bridges between Europe and China. Yet, Knüsel is unequivocal that the true intent is technology transfer—gaining access to intellectual property, research findings, production process information, data, and know-how. While such structures are not illegal per se, they provide China with critical access to Western technological advancements.

A concrete example illustrating these dynamics is the failed “Innovation Centre Rapperswil” project. Proposed in 2023 by SinoSwiss Holding, a subsidiary of Chinese firm Fenshare Holding, the initiative sought to establish a hub in Rapperswil-Jona, Switzerland, offering free premises for three years, training programs, and funding access. Despite its appeal, the project did not materialize, underscoring the complexities involved.

Knüsel acknowledges the attractiveness of such offers but warns Swiss start-ups not to be blinded by the perks. She highlights the long-term objective of China’s five-year plans: to dominate various high-tech sectors, leaving no room for Swiss competitors. The goal is clear—Chinese dominance rather than a balanced Sino-Swiss partnership.

For companies willing to engage with China, numerous opportunities exist, including funding, tax incentives, land grants, and subsidized rents in targeted sectors. However, these come with significant risks.

The foremost risk is losing control over proprietary technology, production processes, and know-how. Knüsel points out that economic espionage is prevalent in China, and defending intellectual property theft requires substantial legal resources—resources that many Swiss start-ups may lack.

Moreover, depending on the geographic location within China, companies may be compelled to transfer knowledge or technology as a condition of doing business.

Knüsel reminds that China remains an authoritarian state-capitalist regime, which shapes the environment in which these technology transfers occur and complicates protections for foreign intellectual property.

This evolving landscape presents a critical challenge for Swiss start-ups and policymakers alike, as they navigate the balance between opportunity and safeguarding intellectual property in the face of China’s strategic ambitions.