Tal
Handelshögskolan i Stockholm 14 mars 2007
Sten Tolgfors, Handelsminister
Tal vid invigningen av China Economic Research Center (CERC)
Let me begin by congratulating all concerned on this excellent initiative. I am a devoted friend of the Chinese people. I am very pleased to be part of the inauguration of the China Economic Research Center, a much-needed center in Sweden. I very much support its establishment and purpose. I compliment Ericsson for its support to the Center.
China is becoming increasingly important - economically, politically and culturally. I believe that Chinese culture - art, design and ancient history - will be a great inspiration to our young European generation. Perhaps as influential as America has been to my generation.
In-depth knowledge and analysis can better help us take advantage of opportunities that arise and address the challenges that we face.
China is clearly an important market for Ericsson and Ericsson is important to Sweden. Ericsson has focused on research and development in China and has made huge investments in the country.
The Chinese economy have grown by 9 per cent annually over the last 25 years. China is the fourth largest economy in the world, and the third largest trading nation. China is also the third most important recipient of FDI.
At present, about 400 Swedish companies operate in China. In 2006, one Swedish company per week began operations in China.
The continuous development of China will have a profound impact on our economy.
Sweden has traded with China since the 18th century. China is now our largest trading partner in Asia. In 2005, our trade with China including Hong Kong amounted to about USD 7.5 billion and the upward trend continues.
Still, our trade with China only constitutes 2 per cent of total Swedish trade. This clearly shows that the potential for increased trade is substantial.
Having said that, we should note that considerable export volumes from China to the world market generated by Swedish companies such as IKEA and H&M do not show in the statistics. Products move directly from factories in China to stores in other countries - not through Swedish ports.
China is one of the most important investors in the world. The importance of Chinese FDI will continue to grow in the coming years.
However, China's current economic development faces a number of challenges. Prosperity is very unevenly spread. This causes gaps between rural and urban areas and growing social unrest. Labour conditions in China are sometimes troublesome. Today, millions of people work under unreasonable conditions. This is partly a question of the level of development in China, but it is also a question of labour rights and freedom of association.
The environmental cost is high and rising. Some argue that the cost of pollution is growing at the same rate as the economy. Others estimate that the environmental cost is about USD 64 billion a year, or 3 per cent of GDP. Sixteen of the 20 most polluted cities in the world are in China.
Sweden has the technology and expertise to be of assistance to China in this regard.
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Human rights are a priority for the Swedish Government, as well as for the EU. We would welcome every step towards the abolition of capital punishment in China. I am critical of the death penalty in whichever country it is applied.
China and Sweden have a close dialogue on Corporate Social Responsibility (CSR). Swedish companies can play - and are playing - a significant role in setting a good example. The Chinese government has also shown an increasing interest in these issues.
The Raoul Wallenberg Institute has been doing important human rights work in China for more than 10 years.
We support China's legal reform, not least with regard to the rule of law and human rights. The rule of law is important both to my government and to Swedish companies and their long-term commitment to invest in China.
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As you know, Sweden opposed the imposition of quotas on Chinese textile exports to the EU in 2005, as well as the European Commission's proposal last year to impose duties on imports of Asian shoes.
Sweden's long-standing tradition of being a free trader and its rejection of all kinds of protectionism allow us to engage in a dialogue even on issues where our views differ.
Trade contributes to economic and social development and our free trade policy can play a role in promoting respect for human rights.
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Development in China is not following the traditional path. China is simultaneously at different levels of development. It would be to underestimate China to say that it is just "the factory floor of the world" - a manufacturer of textiles, clothing, toys and electronics. China also has all the world's telecom companies in different joint ventures and a Chinese telecom industry that matters. Chinese companies are already exporting 3G equipment, and produce many more cars than Sweden annually. These companies and the Chinese government are striving to move into other high-tech areas. They will most likely succeed.
- The Chinese market offers an array of opportunities for Swedish industry. However, there are still a number of tariff and non-tariff barriers to trade and restrictions on investment in manufacturing and services, particularly in "strategic areas" such as the telecom, automotive and energy industries.
Foreign companies that have been operating in China for a long time are not allowed to compete on equal terms. China is developing its innovation capacity with an emphasis on "indigenous innovations". The Swedish Government is working to secure favourable conditions for Swedish enterprises in China in line with the conditions we offer Chinese enterprises in Sweden. Trade is a two-way street.
- We are working to abolish obstacles to trade that affect our companies in China. These include complicated and time-consuming import and export procedures, inadequate protection of Intellectual Property Rights (IPR) and discrimination with regard to government procurement. We are working on this through the WTO, as well as bilaterally and through the EU. China has taken a number of measures since its WTO accession in 2001, but there are serious shortcomings in China's WTO implementation efforts.
- It is primarily through the WTO that we can ensure open trade and stable rules, to the benefit of us all. An ambitious result of the Doha Round is of great importance and a top priority for us. I would encourage China to act on an equal footing in the ongoing negotiations, to our mutual benefit. The stakes are high. An ambitious result would help China achieve its long-term development goals.
- To summarise, China's reform process has significantly improved the quality of life for many of its people; more than 300 million people have been lifted above the poverty line.
- China is becoming an increasingly important global player. We believe it is important for China to become fully integrated into the multilateral framework. We need China as a responsible stakeholder in a globalised world.
- I could continue at length about the fact that we need to deepen our relations, about China's economic growth, about the business climate and China's role in the world economy. I could go on about opportunities and challenges. All of these issues serve to underline the importance of this Center. The competitive advantage of Swedish companies will increase through analysis and a better understanding of the business climate in China. Cooperation, research and increased knowledge will further deepen our relations.
- I believe very strongly that Sweden and Swedish companies can prosper from China's impressive growth, with our policy of free trade and openness, a highly competitive business sector, a well-educated workforce, and advanced research and development resources. I believe equally strongly that this will be good for the Chinese people.
