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Swedish business history in China

Former consul-general Bengt Johansson has started a project to document, in a historical book, the pros and cons of Swedish investments in China since the 1970s until now.

TEXT: Jan Hökerberg
16 DECEMBER, 2019

When the veteran diplomat Bengt Johansson today follows what is said about China in Swedish media he notes that most of what is reported is “bad news” that doesn’t reflect how China is perceived by Swedes who actually live and work in China.

“I spend one month every year teaching at Shanghai University and the rest of my time in Stockholm and I’m worried about the big differences in the views about China between those in Sweden and Swedes who are or have been stationed in China,” says Johansson, who has worked with China-related issues since 1975 and has held positions in Shanghai – twice as consul-general – at the embassy in Beijing twice and also including a stint at the Hong Kong consulate general and at the trade office in Taipei.

This experience gave him the idea to start a book project that involves interviewing people in the Swedish business community that have – or had – worked in China, adding his own reflections and analysis. The project is already underway and some 30 people have been interviewed so far.

“Today, as the surge in Swedish investments is over and the later surge in Chinese investments to Sweden seems to have taken a pause, I think we all need to reflect a bit on the ever-changing face of Swedish-Chinese trade. To make it easy, I want in my book project to start with the first contacts after the Cultural Revolution and wrap up by looking at the situation today. The future is for others to speculate about. Looking back, I am surprised at how much the situation has changed on a year-by-year basis. The majority of companies have adapted to the new conditions and skilled business people have even advanced their companies’ positions,” says Johansson.

In the early 1990s, many of Sweden’s largest industrial companies started to set up companies in Beijing. China introduced joint-venture (JV) legislation, but today most JVs have transformed into wholly foreign-owned companies.

“I haven’t met anyone who hasn’t had problems with their joint ventures. It’s like two parties that are sleeping in the same bed but have different dreams,” says Johansson.

When China introduced its wholly foreign-owned enterprise (WFOE) legislation in 2000, it became possible for foreign companies, with the exception of certain strategic sectors, such as telecoms, energy and vehicles, to set up companies without a mainland Chinese investor.

“This made it much easier for foreign entities to do business in China. All the same, many worried that China would not adhere to its WTO commitments and I was invited to work in the EU Commission for two years to assess China’s and Taiwan’s adoption of WTO rules” he says.

Born in 1948, Johansson grew up in Kungälv, near Gothenburg in Western Sweden. After graduating from Gothenburg School of Economics in 1970, he continued his studies at Stockholm University, where he took a Bachelor of Arts (BA) in East European languages. This combination of studies led him to the Swedish Trade Council, which is today called Business Sweden, where in 1974 he started to work first with issues related to Eastern Europe and soon thereafter with activities in China.

“Sweden had already held an industrial exhibition in Beijing in 1972. It was a landmark in terms of the western world’s relations with the People’s Republic of China. At that time, Sweden had a very strong position in China. In 1950, it was the first western country to establish diplomatic relations with China and had become the first nation in the West to sign both a trade agreement and an investment protection agreement with the People’s Republic of China (PRC) and for many years we had the first-mover advantage,” says Johansson.

In 1978, he joined the Swedish Ministry for Foreign Affairs, where he served in a number of positions mostly in trade, finance and administration.

Ten years later, he really began his Asian journey when he moved to Hong Kong to work at Sweden’s consulate general, then to the embassy in Beijing, then to the trade office in Taipei, back to Beijing and, in 1996, as consul-general in Shanghai, before returning to Sweden in 1999.

“At that time, Shanghai had a mayor who’d lived in Sweden and who gave all of us the open-door treatment. All of our visiting delegations were able to meet with him – which made other consul-generals rather jealous,” Johansson recalls.

Back in Sweden, he worked with EU relations at the prime minister’s office as well as with trade promotion for the government’s Asia department before it was time for a second stint as consul-general in Shanghai in 2008-2012.

“The 2010 Shanghai World Expo was on top of my agenda and it turned out to be a very successful event. We had a large number of visits from important people in politics and business. It felt like half of the establishment in Sweden travelled to Shanghai for the expo,” he says.

I want in my book project to start with the first contacts after the Cultural Revolution and wrap up by looking at the situation today.”

During his four years in Shanghai he had the idea to write a book about Swedish people who have lived in Shanghai since the mid-19th Century, Shanghai – svenskars liv och öden 1847-2012. This was followed up by a second book, Bland direktörer och sjömän i det gamla Shanghai, which described the lives of Swedish businessmen and sailors in old Shanghai.

In his new book, he plans to analyse Swedish companies’ profitability in China, how employment in China and Sweden has been affected as well as the recent decline of foreigners with expatriate contracts. He will also look at broader subjects such as globalisation, the “Go West” policy and the introduction of e-commerce.

“Today, we know that China is the main winner of globalisation and without its WTO membership this would not have been possible,” says Johansson.

He is interested to get in touch with more people from the Swedish business community who have experience of working actively in China. Anyone who is interested to participate in the book can contact him at [email protected].