Bilateral trade between the two countries is worth $26 billion through imports and exports of watches, medicines, textiles and dairy products.
The deal marks China’s first free-trade deal with a continental European economy and is one that it hopes will be felt beyond Switzerland's borders.
"This free-trade deal is the first between China and a continental European economy, and the first with one of the 20 leading economies of the globe," Chinese Premier Li Keqiang told reporters after the two countries signed the preliminary agreement. "This has huge meaning for global free-trade.”
For his part, Swiss President Ueli Maurer described the agreement as a "real milestone".
China is Switzerland's third biggest trading partner after the European Union and America, with exports to China of watches, pharmaceuticals and machinery amounting to over $22 billion.
China has hinted it could make Switzerland its financial centre of choice, if Beijing allows offshore trading of its currency, the yuan.
