China signed a free trade agreement (FTA) with Switzerland Saturday in Beijing after more than two years' negotiations, marking the first FTA between the Asian giant and a continental European country.

The FTA is a fine deal and mutually beneficial, Chinese Commerce Minister Gao Hucheng said at a news briefing after he signed the deal with Swiss Federal Councilor Johann Schneider-Ammann.

The agreement will allow zero tariffs for 99.7 percent of Swiss exports to China and 84.2 percent of Chinese exports to Switzerland, Gao stated.

Under the pact, 99.99 percent of Swiss exports to China and 96.5 percent of Chinese exports to Switzerland will enjoy tariff reductions, higher than the usual level of 90 percent for an FTA, according to Gao.

The pact is expected to facilitate  industrial cooperation between the two countries and will also set new rules in the areas of government procurement, environment, labor and intellectual property, Gao said.

Schneider-Ammann, also the head of the Swiss Federal Department of Economic Affairs, told reporters that the pact is expected to double bilateral trade between China and Switzerland as well as increase mutual direct investment.

Switzerland's parliamentary review of the pact is expected to be finished by the second half of 2014, he noted.

China's low-end manufacturers, such as textile and machine work, will increase their competitiveness in Switzerland while Chinese firms dealing in precision machinery, watches and pharmaceuticals which Switzerland is well known for, will feel fiercer competition after the FTA takes effect, Zhang Jianping, a researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission, told the Global Times Sunday.

The two economies are strongly complementary in industrial structures, so the proportion of tariff reductions of exports between both countries will be quite high, Zhang said in the interview.

The FTA has set a positive example for cooperation between China and other developed countries in solving disputes such as recognition of China's market economy status, Qiang Yongchang, director of Fudan University's International Trade Research Center, told the Global Times Sunday.

The deal, signed following the two countries inking a memorandum of understanding during Chinese Premier Li Keqiang's visit to Switzerland in May, came after Iceland signed a free-trade deal with China in April, the first with a European nation.

Gao said China should also launch similar cooperation with other European countries, even with the EU.

The FTA is a strong signal to the world against trade protectionism, Li said Saturday during his meeting with Schneider-Ammann, Xinhua News Agency reported.

Li said pushing forward freedom and convenience in trade and investment could be "a good remedy" for the recovery of the global economy, the report said.

The signing comes amid trade disputes between China and the EU, including the EU's announcement in June of punitive tariffs on China's of solar panel exports and China's anti-dumping investigation of wines from the EU on July 1.

The Sino-Switzerland FTA is unlikely to affect the trade relations between China and the EU, as Switzerland is not a member of the 27-nation bloc, Qing said.

But Zhang said the FTA is expected to ease China's heightened trade tensions with the EU.

China's FTA talks with Chile in Latin America was followed by Peru, Costa Rica and Colombia, he said, who expect similar reactions from other European countries in launching free-trade talks with China.

Switzerland is also expected to convey its deep understanding of China, Zhang noted.

Global Times