Tal
Svenska handelskammaren i Shanghai 14 juni 2007
Sten Tolgfors, Handelsminister
Handelsminister Sten Tolgfors tal på svenska handelskammaren i Shanghai
Dear friends,
China is day by day becoming more and more important - economically, politically and culturally.
The Chinese economy has grown by 9 per cent annually over the last 25 years. It is the fourth largest economy in the world, and the third largest trading nation. China is also the third most important recipient of foreign direct investments (FDI).
In a historical perspective this is no surprise. China is simply reclaiming its former position in the world economy, as GDP continues to grow. Chinese tradesmen has been the oil in the machinery of Asian trade for many hundereds of years.
I believe that Chinese economy, culture - art, design and ancient history - will be a great inspiration to the next generation of young Europeans. Perhaps as influential as America has been to my own generation. We can already see an increase of Chinese influences in movies, food and fashion.
At the same time the meaning of globalization is nowhere as obvious as it is right here. People buy western designer brands, the more exclusive the better, when Swedes wait six month after release and then buy the cheaper domestic brands. If commmerce and branding are western innovations, then globalization has truly brougtht them here.
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Sweden has traded with China since the 18th century. At that time it was high fashion to buy chinese porcelain, painted with the family coat of arms. The Swedish East India Company was, during its prime, the most prosperous company that Sweden has ever had.
Our efforts to trade with China were not always taken kindly by other European powers of the day, but we held on. I am glad that the Swedish East India company behaved in such a way that it is still described in positive terms in China today.
Perhaps that's one of the resons that the replica of the Swedish East India Man - Götheborg - received such a marvelous reception here, in Shanghai. It has truly contributed in opening doors for Swedish trade, and deepened our bilateral relations.
The other week, I had the privilege of sailing up the Thames in London with Götheborg, passing Tower Bridge and shooting a salute in front of the Tower of London. It is an impressive ship, reminding us of old trading traditions between Sweden and China.
When the ship returned to its home port in Gothenburg last week it was received by the King of Sweden and the President of China. A journey that started in 1745 ended with a successful Chinese state visit to Sweden, 262 years later.
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At present, about 400 Swedish companies operate through their subsidiaries in China. Last year, one additional Swedish company per week began operations in China.
China is Sweden's largest trading partner in Asia. In 2006, our trade with China amounted to about 7 billion euros. Still, China only constitutes some 2 per cent of our trade - so the potential for an increase is very large.
Chinas export to us is expanding rapidly, while Swedish exports to China is not developing at quite a similar pace. This leaves us with a trade deficit to China in the order of 17 to 18 billion RMB. Nevertheless, there is still great potential to increase trade. I welcome more Chinese exports to Sweden. It is to the benefit of our consumers, but also to our companies working with global supply lines, and importing cost effective parts and components.
The statistics underestimates the importance of our economic co-operation. Swedish companies, such as H&M and IKEA, produce here and export to the global market.
However, I would really like to see increased Swedish exports to China. Dismantling trade and investment barriers is crucial in order to achieve this.
In order to achieve this we have a common interest in solving some specific trade issues.
China's government is committed to protect intellectual property rights. But in implementation judges, customs and police are confronted with a difficult task to enforce IPR rights in everyday practice. Increasingly also Chinese companies are hurt by IPR violations. Sweden favours a cooperative approach to this issue, and is encouraging China to take further steps, as is the EU.
Export and import procedures and participation in government procurement need to be addressed, together with procedures for product certification, and complex rules restricting foreign investment. I will study these NTBs during my visit.
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There is no question that China is on the road to prosperity. We should consider that every road can have its bumps. Booming economies will sooner or later see rising costs and wages, promoting structural change. It happened to the former Tiger economies in Asia. South Korea managed to work itself through it, and is now once more a great success.
I think it's too limited to se PRC as the production line of the world. Its ambition is to move into higher value added production, and invest in R&D, for the longer run.
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China faces a number of challenges. Economic resources are unevenly spread. This causes gaps between rural and urban areas, something the government has taken note of.
The environmental cost is high and rising. Some Chinese officials argue that the cost of pollution is growing at the same rate as the economy. Others estimate that the environmental cost is about 3 per cent of GDP.
On the good side is that Sweden has the technology and expertise to be of assistance to China in this regard. This could be a future field of co-operation for us.
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Swedish prosperity is built on international trade and the ability of our companies to compete on global markets. Our economy is competitive and open. Exports and imports combined correspond to about 90 percent of GDP.
Free trade is a cornerstone of Swedish policy.
Sweden opposed the imposition of quotas on Chinese textile exports to the EU in 2005. We also opposed the proposal last year to impose duties on imports of Asian shoes.
We are free traders for real, and I know this is to our benefit in the eyes of the Chinese. They are depending on market access, as are we.
My Government's foremost trade priority is an ambitious result in the Doha Round. It would provide stability and predictability for the world economy, and give global GDP gains.
During my visit I will meet with the Minister for Trade Bo Xilai. I encourage China to act on an equal footing in the ongoing negotiations, and to support a free trade agenda. An ambitious result would help China to prosper.
China has taken a number of important steps since its WTO accession in 2001. The WTO membership has contributed to opening up the economy.
Sweden - Shanghai relations
Shanghai and the Yangtze River Delta Region are of central importance to Swedish companies. The fact that the Swedish exports to this region amount to about 1 billion euros is amazing. That is more than the Swedish exports to Singapore, Malaysia and Thailand combined.
I'm very pleased to announce that Sweden will participate in the World Expo 2010. In just a few hours, after my meeting with the Party Secretary, I will send an official note on this to the Chinese Embassy in Sweden.
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There are a lot of opportunities for trade, investment and co-operation. Sweden and China are as shown by the recent State visit in a phase of deepening economic cooperation. Sweden's trustworthy stance as free trade advocate gives us the opportunity to discuss also other matters.
During the State visit the Swedish and Chinese Governments signed one Memorandum of Understanding on Environmental issues and one on Corporate Social Responsibility. This opens for more initiatives and a broader dialogue on issues such as labour standards, and environmental concerns.
Swedish companies follow this development with interest and play a significant role in setting a good example.
There is economic rational in emphasizing Corporate Social Responsibility. European consumers take great interest in environmental and labor rights issues. Consumers are increasingly favoring products that are produced under reasonable conditions. If these issues are not addressed, any company can quickly find its market position changed.
I do not want to see public interest in these issues turn into protectionism. One way to avoid this is to encourage CSR.
Sweden as well and the EU continue our broader dialogue on human rights with China. We would welcome every step towards the abolishment of the capital punishment in China, such as the new role for the Supreme Court in reviewing all death sentences. Sweden is opposed to capital punishment whereever it occurs.
The Rule of Law is important to Swedish companies and their long-term commitment to invest in China.
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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 out of poverty.
The Chinese market offers great opportunities for Swedish industry. However, there still are 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, that we will discuss.
Sweden is meeting globalization of the economy with good self confidence. I believe Swedish companies are well set to prosper from China's 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 as strongly that this will be good for the Chinese people.
Less than a week ago we saw the first Chinese State Visit to Sweden. A visit that opens opportunities to further expanding our Sino-Swedish relations.
