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Original illustration by Tse Yuet Ching. 

10:59 am | June 30, 2020

Solving Sweden’s China Puzzle

The perception of China has deteriorated among Swedes in recent years as relations have grown strained. Can Sweden find a way forward to constructive dialogue and meaningful exchange with Beijing?

By Jerker Hellström

A panel discussion at Sweden’s annual national security conference in January 2019 was coming to a close, the focus onstage being how Sweden should deal with an increasingly aggressive China, when one panelist noted with considerable concern the complete lack of a Swedish China strategy. At this point, Sweden’s then-State Secretary for Foreign Affairs, Annika Söder, surprised everyone with a sudden intervention from the auditorium. “The work is ongoing,” she said.

While there had been constant deliberations within the Ministry of Foreign Affairs about how to manage China, this was the first time a government official had stated that Sweden’s China policy would be articulated so openly.

“This was unheard of,” one ambassador, interviewed by this author, recalled. “In spite of the opposition’s pressure on the government to clarify its policy on China, I very much doubt that there was any effort to formulate an official strategy.”

Notwithstanding, the government announced in its foreign policy declaration to Parliament four weeks later that it was “working on developing a new China strategy.” What had seemingly been a spontaneous intervention had become part of government policy. Sweden would issue its first comprehensive country-specific policy paper, and it was obvious to all why the country concerned would be the People’s Republic of China, given the rising unease across Europe over its increasing global influence and Beijing’s recent diplomatic wrangles with Stockholm over a range of issues.

The End of Naïveté

The Swedish government’s decision in early 2019 to formulate a China strategy was a sign of the times and reflected increasing concerns about China across Europe. These European concerns were brought to the fore in March 2019, when the European Commission issued a 10-point plan in which it vowed to become more “realistic” and “assertive” in its approach to China. In the “EU-China Strategic Outlook,” the Commission for the first time referred to China as “an economic competitor in pursuit of technological leadership and a systemic rival promoting alternative models of governance.”

Domestically, the Swedish decision to publish a China strategy was also logical as a response to growing accusations that policymakers had been far too “naïve” in their dealings with Chinese counterparts. Critics voiced concern that this “naïveté” had allowed China’s state-aligned enterprises to do business in Europe without any reciprocity. Moreover, they said that “naïve” Swedish industry officials had erroneously assumed that increasing bilateral trade would contribute in the long run to Chinese transparency and respect for human rights, leading to a reduction of bilateral differences over such issues.

Domestically, the Swedish decision to publish a China strategy was also logical as a response to growing accusations that policymakers had been far too “naïve” in their dealings with Chinese counterparts.


Perceptions of China among Swedes had notably deteriorated from the previous year, in large part due to a steady stream of negative news from the country coupled with aggressive criticism in the Swedish media from a particularly outspoken Chinese ambassador in Stockholm, Gui Congyou. Ambassador Gui at one point in 2018, for example, rebuked national broadcaster Sveriges Radio for an episode of the current affairs show Konflikt, which he claimed was full of factual errors and “totally unacceptable.” The episode featured an account by Swedish human rights activist Peter Dahlin about his forced confession on Chinese television, Chinese refugee espionage in Sweden’s Tibetan diaspora, and Chinese attempts to build soft power through investment in the international film industry. Gui later agreed to a nearly 45-minute-long interview on Konflikt, stating that it was the embassy’s obligation to help Swedish journalists obtain an “objective and true” understanding of China.

Another prominent China row played out in September 2018 as the ambassador alleged the mistreatment of Chinese tourists in Stockholm, a case fraught with factual misrepresentations that seemed to some observers to be an attempt by China to distract from other human rights related disputes. Chinese state media denied such suggestions

Overall perceptions of China declined to the point that by summer 2019, a poll showed that Swedes held more unfavorable views of China than did any other country, except for Japan.

One issue proving a constant thorn in the relationship has been Beijing’s refusal to release the Hong Kong-based publisher Gui Minhai, a Swedish national, who was detained in Thailand in late 2015. Gui appeared on Chinese national television in early 2016, delivering an apparently forced confession to a traffic offense dating back to 2003, for which he was sentenced to prison. Gui was one of four members of Hong Kong’s Sage Communications, a small publisher specializing in lurid books about the private affairs of senior Chinese officials, to be detained – the other three detentions having occurred while Gui’s colleagues were on visits to China.

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Screenshot of an apparently forced confession by Gui Minhai appearing on Chinese state television.

In February 2020, Gui was sentenced to 10 years in jail for “illegally providing intelligence overseas.” The court claimed that Gui had applied to reinstate his Chinese citizenship in 2018. Swedish diplomats were barred from observing his trial and have been repeatedly denied consular access. China’s handling of Gui’s case, which is and will remain a priority on the Swedish government’s China agenda, has put the relationship with Sweden under pressure and has contributed to a more critical Swedish approach.

Diplomacy and Business

In November 2018, the Swedish King Carl XVI Gustaf was scheduled to visit China, reportedly as part of the government’s effort to have Gui Minhai released. He would have travelled with a Swedish business delegation, but the plans were cancelled at the last minute. According to media reports, the decision to cancel it was prompted by a lack of positive response on Gui’s case from Beijing.

Swedish Prime Minister Stefan Löfven has generally kept mum on the bilateral relationship, and it has been difficult to discern whether his posture has changed as the relationship with China has grown more difficult. Meanwhile, appeasement has proven ineffectual in addressing Swedish concerns in the relationship.

During his first visit to China as PM in March 2015, in the period before the detention of Gui Minhai, Löfven was pressed by Swedish reporters to characterize the Chinese system, and whether or not he would refer to it as a dictatorship. The PM cautiously avoided anything that might be viewed as antagonizing China, instead sticking to the line that China is “a one-party state lacking free elections and where political opposition is not allowed.”

Interest in this question of labels in the Swedish media originated in an incident a few months earlier, in which then-Foreign Minister Margot Wallström had called Saudi Arabia a dictatorship, triggering a crisis with the Arab League. The fear among some Swedish businesses was the Löfven might precipitate a crisis similar to that with Saudi Arabia, prompting a response from China that would affect their interests. After meeting with the PM to relay business concerns ahead of his visit, Irena Busic, CEO of the Swedish Chamber of Commerce in China, told Swedish media: “China is such a big and important market for Swedish companies so it would be devastating if something happens in the relations between the countries.”

Prime Minister Löfven paid a second visit to China in 2017, where he attended the World Economic Forum in Dalian. Löfven told Swedish reporters that he would raise Gui Minhai’s case as he visited China’s leader Xi Jinping in Beijing “in a manner that best serves the purpose” and declined to comment further. So Sweden did put human rights on the agenda, but as usual the focus was on trade and investment. Executives from more than 60 Swedish companies accompanied the PM, and 18 contracts were signed with Chinese enterprises and agencies.

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Chinese Ambassador to Sweden Gui Congyou has earned a reputation in Sweden for his provocative and combative remarks on bilateral relations. Image by European Center for Disease Prevention and Control (ECDC) posted to under CC license.

Finally, in November 2019, Löfven came under pressure to make another statement on China. This time, the tone was different. He responded to threats coming from the Chinese ambassador to Stockholm. Culture Minister Amanda Lind was due to present the annual Tucholsky literary prize at an award ceremony, and ambassador Gui Congyou had commented that she would be banned from entering China if she participated in the event. The laureate was Gui Minhai. Löfven responded by stating that Sweden “would never cave in to this kind of threat. Never. We have freedom of speech in Sweden and that is the point, period.”

The threats from the ambassador, and constant criticism of Swedish academics and journalists, led three political parties to call for Gui’s expulsion from the country. Sweden’s Foreign Minister Ann Linde responded, however, that she preferred dialogue with China and that the government had sent ”clear signals” to Beijing in response to the threats.

The Swedish foreign ministry has summoned the Chinese ambassador dozens of times since he took on his current job in 2017, often in reaction to the Chinese embassy’s veiled threats and criticism of various media outlets and commentators. In his latest broadside in January this year, Gui likened Swedish media to a boxer competing above its weight: “It’s like a 48-kilogram lightweight boxer who provokes a feud with an 86-kilogram heavyweight boxer,” said Gui, “who out of kindness and goodwill urges the (smaller) boxer to take care of himself.”

Trade and Investment

At least since 2018, Sweden’s bilateral relationship with China has seemed to hover at a historic low. Despite this apparent state of diplomatic crisis in Sweden’s relationship with China, the impact on the trade relationship between Sweden and China seems to have been limited. In fact, Swedish exports to China are on the rise. In 2019, Swedish exports to China rose by 7 percent to 72 billion crowns (US$7.7 billion). This made China Sweden’s eighth largest export destination, making it a more important export market than France.

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When judging the relationship in terms of investment, there is also little evidence of any weakening. A recent study by Sweden’s Defence Research Agency, in which the author was involved, showed that the annual amount of Chinese acquisitions in Sweden had increased steadily in recent years, reaching a peak in 2016. Moreover, the largest Chinese acquisition in Sweden to-date was completed in 2018, when Zhejiang Geely took a minority stake in Swedish truck-maker AB Volvo, reportedly worth roughly 3.25 billion euro (3.75 billion USD). The deal was one of the biggest acquisitions made by a Chinese enterprise in Europe and North America that year.

But China’s increasing investment activities have also raised concerns in Sweden. The proposal from a Chinese consortium in late 2017 to build Scandinavia’s largest port in Lysekil on Sweden’s west coast set off a fervent debate on how China benefited from the naïveté of local officials. Some critics questioned the port’s environmental impact; others noted that Chinese state-affiliated enterprises would build and operate a major piece of infrastructure, which they saw as a national security risk. Due to the controversy, consultants representing the Chinese companies, state-owned China Communications Construction Company (CCCC) and the Hong Kong-registered Sunbase Group, informed the municipality of Lysekil that they would withdraw the offer.

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The port of Lysekil on Sweden’s coast, where a Chinese consortium planned in late 2017 to build Scandinavia’s largest port.

Other controversial cases included the takeover of a naval facility by Chinese businessman Ming Wai Lau, also in 2017; a Chinese built and operated satellite station in northern Sweden (which researchers warned could be used by the Chinese military to conduct surveillance); and the acquisition of three semiconductor companies – to name just a few.

These and other cases triggered a larger debate in Sweden about the risks posed by China, which came simultaneously with the European Commission’s proposal in September 2017 for the establishment of a framework to screen foreign direct investment (FDI). Sweden, which has traditionally been a vocal critic of trade barriers, was initially skeptical of the proposal but eventually supported it, noting “problems concerning the taking over of activities that handle sensitive infrastructure and technology.” Until 1992, Sweden had legislation in place which required official authorization for the acquisition of domestic firms. The law, however, had been repealed in preparation for Sweden’s accession to the European Union in 1995.

The European Commission noted in its proposal that more than half of the member states lacked screening mechanisms, and Sweden belonged to this group. In order to comply with the Commission’s proposal, the Swedish government appointed a commission of inquiry in August 2019 to propose a design for an investment screening mechanism. The inquiry is to present its conclusions by November of 2021.

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While the commission of inquiry does not explicitly name investment from China or any other country as a focus of concern, the debate in Sweden and many other parts of the EU has clearly been focused on Chinese acquisitions.

The Swedish Security Service, the agency responsible for counter-espionage, has stated that Sweden is “undoubtedly in the Chinese sphere of interest” in terms of strategic investments and acquisitions, but also as a target for intelligence activities. In 2019, Chinese intelligence threats to Sweden had increased further, the agency said.

Lars Fredén, who served as Sweden’s ambassador to China from 2010 to 2016 – the period during which most of the Chinese acquisitions in Sweden were completed – says Sweden lacked an awareness of these threats. “Sweden represents a combination, which is unique in the West, of high technology capability – which often has direct military applications – and limitless naïveté,” Fredén said at a 2019 seminar about the government’s China strategy.

The Swedish Security Service has stated that Sweden is “undoubtedly in the Chinese sphere of interest” in terms of strategic investments and acquisitions, but also as a target for intelligence activities.


Existential Values

All of these political and economic factors contributed to the formulation of the Government Communication, “Approach to matters relating to China,” which was released on October 2, 2019. This was the outcome of the work on a China strategy that State Secretary Söder had said was ongoing nine months earlier. In the white paper, the government outlined “Sweden’s relations with China and the Government’s approach to matters relating to China.” The approach included all policy areas, from security and defense to culture and media.

This was the first time Sweden had articulated a policy on China since the launch of its “Asia strategy in 1999. The “Asia strategy” had been updated just once, in 2002 (discussed below). At that time, China’s exports accounted for just five percent of global exports in goods. By 2018, however, China’s share of global exports had risen to over 13 percent.

In 1999, there was still a strong belief among Swedish policymakers that engagement with China on trade, investment and other matters would lead to a more liberal political climate in China. In the previous year, China had signed the International Covenant on Civil and Political Rights (ICCPR) and had vowed to ratify it. The government’s Asia Strategy referred to Beijing’s pledge as “a new foundation (…) for dialogue and co-operation with China in this area of central importance.”  

Already in the updated strategy in 2002, the lead authors had noted that China had not lived up to these expectations. The Chinese government had, in fact, not ratified the ICCPR. (It still has not, and some have now asked whether it shouldn’t un-sign the Covenant). Instead, they noted that developments in China had been negative in many areas, including the enforcement of capital punishment, the prevalence of torture and an apparent deterioration in the rule of law. The situation in Tibet and Xinjiang had worsened, religious groups had been persecuted and banned, and followers of the Falun gong movement had been subjected to detention and torture.

After Xi Jinping came into power ten years later in 2012, Swedish policymakers slowly began to realize that many of the observations made in 2002 were still valid and that political reform was visible nowhere on the Chinese Communist Party’s agenda. The Party’s suppression of individual freedoms in Hong Kong (and the detention of Gui Minhai as part of this clampdown), China’s military build-up and the militarization of the South China Sea, an ever-tightening isolation of Taiwan from the international community, and programs to assimilate Uighurs and other Muslim minorities by force are just a few issues that have exacerbated the sense that Beijing has little interest in the rules-based order favored by Sweden.

Sweden’s main opposition party, the liberal-conservative Moderate Party, has come out as the most vocal proponent of a tougher stance on China. In April 2018, party leader Ulf Kristersson noted in an op-ed that there was a need to defend “existential values” in Europe – even if it this had negative consequences for business and trade with China. His concerns over China’s political development in many aspects foreshadowed the criticisms that would come in the China strategy communication, “Approach to matters relating to China,” in 2019:

The optimistic belief in ’liberal’ political reforms a few years ago has not been met in any way. To the contrary, the Communist Party of President Xi has strengthened its grip on China’s most important institutions, and on business. As a result, some of the world’s most technologically advanced and most valuable internet companies are now living side by side with the world’s most advanced internet censorship. These are new times.

But in its China communication, the Social Democrat Party-led government was more restrained in its depiction of the direction China was heading, characterizing the relationship as a balance of “opportunities and challenges.” The introduction summarized the communication in a single sentence: “China’s development presents both opportunities and challenges that concern an increasing number of the Government’s policy areas.”

The 22-page policy paper described Sweden’s current relationship with China in a relatively diplomatic manner, leaning on statements from the European Union and Swedish intelligence for many of the more critical assessments. After stating that the EU is a cornerstone for Sweden’s China policy, the paper laid out the government’s approach to China in most major policy areas, from security and defense to culture and media, again pointing out what it saw as opportunities and challenges stemming from the involvement of the Chinese state.

With its export-driven economy and a strong values-based identity, Sweden sees unimpeded trade and human rights promotion as vital pillars of its China policy. While the communication stated that the government would push back against China if it challenged those interests, it did not reveal how to balance the two if needed. 

The Swedish government regularly issues country-specific human rights reports, and the communication cited the most recent issue on China published in June 2019, which asserts that “the civil and political rights situation is serious.” It also vowed to raise the human rights situation in China in interactions with Chinese counterparts “in a clear and consistent manner.”

On the topic of trade, the communication posited that China was increasingly important for Swedish employment and economic growth. It noted, however, that many problems remained, such as intellectual property rights violations, forced technology transfers, and state subsidies. While those issues would be addressed by the EU, the government vowed to highlight trade barriers that Swedish companies face in China as part of the bilateral dialogue.

In an interview with Swedish media in which she commented on this China strategy, Foreign Minister Ann Linde again depicted Sweden’s trade relations with China as a balancing act between opportunities and challenges. Linde stressed that, on the one hand, Sweden wanted a “very good” trade relationship with China. “If we increase our exports to China it will create growth and jobs, and we have quite a lot that is of interest to China,” she said. “There are certainly possibilities to increase exports there substantially, and to attract more investment from China.”

On the other hand, she said, China’s refusal to open its market to foreign companies, its lack of protection for intellectual property, and state support of its domestic companies meant that there was no level playing field for Swedish companies. This was a concern for the government that it would raise with the World Trade Organization, Linde said.

The communication also noted Chinese industrial espionage as a concern, stressing that “(…) there are risks and challenges associated with China in the area of innovation.” The document cited inadequate protection of intellectual property rights, industrial espionage, military-civil fusion, inadequate protection of personal privacy and “China’s emphasis on the State’s responsibility for internet security and control.” “Sweden needs sound knowledge of these conditions and the trade-offs that may arise,” it concluded.

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Screenshot of coverage in February 2020 from the official China Daily, noting that Huawei will not be excluded from bidding for Sweden’s 5G network.

As Sweden plans 5G auctions in late 2020, with applications accepted until the end of this month, the government’s Communication also reflects the increasing scrutiny of the Chinese telecom giant Huawei.  Sweden was one of the first EU member states to adopt legislation for screening of 5G suppliers. Apart from Sweden only France, Italy and the Netherlands had similar legislation in place by the first quarter of 2020. On the issue of 5G, Huawei, which has faced strong US allegations that its equipment can be used for spying, is never explicitly mentioned. The strategy does point out, however, that several countries “have issued restrictions on equipment from certain Chinese suppliers, in light of concerns over these companies’ links to, or obligation to cooperate with, the Chinese authorities.”

Back in February this year, the Swedish Post and Telecoms Authority, the government authority that monitors electronic communications and postal services, announced that there would be no outright ban on Huawei as Sweden looked to begin its 5G network rollout. But it said that all vendors would have to submit to an enhanced security review. Sweden is of course home to Ericsson, Huawei’s biggest competitor. With headlines such as “National security is not for sale,” “Watch out for the Chinese offensive,” and “Unhealthy dependence on China,” editorials in Swedish media have for the first time advocated for the need to screen Chinese suppliers and investors.

In a series of reports, Chinese state media responded with glee to the Swedish decision not to exclude Huawei, which has been a focus of ongoing disputes between China and the United States, and which has been a point of tension between the US and other EU member states, including Germany. "No 'Huawei ban' as Sweden takes next step toward 5G rollout,” read a headline from the official Xinhua News Agency in February. However, Xinhua also notes that the Swedish Armed Forces and the Swedish Security Service will review the vendors. Any decision to exclude Huawei will therefore not be made by politicians, but by state agencies, and will to a certain extent be based on classified information. The principles for the agencies’ assessments of vendors were detailed by the Post and Telecoms Authority in April and include criteria defined in the EU’s toolbox. The Security Service stated in April that ”foreign powers have intensified their activities to weaken Sweden,” adding that 5G was a particular challenge for the country’s ability to manage threats to national security. The agency has stated on several occasions that Russia and China account for the main intelligence threats to Sweden.

A New Attitude

On the government’s work going forward, the China communication again stresses that a strong and united EU is crucial for Sweden’s relationship with China, as the union is “our most important foreign policy arena.” It identifies a need to increase dialogue and improve coordination between government agencies, business and civil society on issues relating to China, but also with “relevant counterparts primarily in the EU.”

Ambassador Fredén, a rare Mandarin Chinese-speaker in the Swedish diplomatic corps, described the Swedish government’s hitherto apparent lack of concern over Beijing as being “Alfred E. Neumanesque,” referencing the freckle-faced, gap-toothed mascot of MAD magazine, an image of calm and lack of concern in the midst of world events (his famous line: "What? Me Worry?").  Fredén expressed the hope that the Communication would mark a new beginning for Sweden’s strategy on China.

It should be noted, however, that accusations of naïveté have come from all sides of the political spectrum, and should not apply to any specific government. Moreover, the “naïveté” towards China that has prompted concern from Fredén and many others may already have given way to a markedly different attitude. No one following the debate on national security in Sweden will have missed the repeated calls for vigilance towards Chinese actors. In Sweden’s Parliament, the Riksdag, few issues generate such strong consensus as those related to China. The rare disagreements tend to relate to what some see as insufficient criticism of China, such as the omission of Gui Minhai’s name in the Statement of Government Policy in 2019, and the Moderate party’s refusal to support recent calls for the Chinese ambassador to be declared persona non grata.

Considering the prominence of China-related issues in the Swedish political debate, there was surprisingly little criticism of the strategy. The main complaints were that it did not provide sufficient detail, and that it lacked specific action points for how to manage the relationship with China.

In a discussion with this author, former State Secretary Söder hinted that Sweden’s deliberations about China in fact tend to be deeper than what the strategy was able to reflect, saying that “a public country strategy cannot be as explicit as an internal one.” After all they form part of Sweden’s diplomacy and going public about its strategic choices may rarely serve national interests. She also stressed that it is always easier for the political opposition to sound tough on China than it is for the government.

In the next few years, China is likely to remain a prominent feature in the domestic Swedish debate. For many of Sweden’s priorities – such as economic growth and national security at home, and a rules-based system internationally – China constitutes a growing challenge. As officials make decisions on issues including Sweden’s 5G rollout and the need to screen foreign investment, China may, however, not always be mentioned explicitly in the public debate. This is not only due to the thematic nature of such security-related matters, which tends to be agnostic to the specific country involved. There are also concerns about possible Chinese repercussions, a general feeling that unspecified actions might antagonize China and impact trade and other relationships – one of the most efficient of the Communist Party’s foreign policy tools – which most Swedes have now been made aware of.

In the next few years, China is likely to remain a prominent feature in the domestic Swedish debate.


There will be times when Sweden needs to stand up to China in order to defend its interests, on trade, norms and values, or whatever those may be. As Sweden lacks the clout to be able act on its own, it is often dependent on Brussels for the implementation of certain foreign policy objectives.

“The EU is the backbone when it comes to China,” Söder said, citing the strategy. “It stresses that the EU is the most important actor for Sweden to coordinate and cooperate with on China.”

Being mindful of the EU’s difficulties in staying coherent in its policymaking on China, Sweden not only emphasizes the need for joint action with fellow EU member states, but also attaches high value to the international system under the United Nations. China’s determination to increase its influence in these institutions has already showed Swedish officials that many of the universal norms and rules that they have pledged to defend are bound to be challenged by Beijing.

Sweden may also want to push for its interests vis-à-vis China with like-minded democracies. Such an alliance of shared interests could include most of the EU and countries such as Canada, Australia, and Japan, where concerns over Beijing’s international influence is high. Sweden is represented in one such initiative, the Inter-Parliamentary Alliance on China (IPAC), which was launched in June.

Similar initiatives could also involve Taiwan, with which Sweden wants to develop closer ties and wishes to see included in international bodies such as the World Health Organization.

More than twenty years ago, the lead authors behind Sweden’s 1999 “Asia strategy” proposed a deepening and broadening of knowledge of Asia in Sweden, and the strengthening of academic research on Asia. They suggested that Sweden should take full advantage of “the knowledge and understanding of China that many Swedes have acquired, not least in the form of language skills.” This was a precondition for constructive dialogue and meaningful exchange with Beijing, the strategy said.

Today, more than twenty years later, there remains a shortage of officials with China expertise in government, and there has been no clear increase in the number of students learning Mandarin Chinese in Swedish universities. On this front, the 2019 Communication does signal one welcome change, noting that the government will establish a “national research-based knowledge center on China.”

The government's aim in setting up the centerwhich will be localized within the Swedish Institute of International Affairs in Stockholm, is, simply put, to increase knowledge about China in the Swedish system. The intention is that the staff at the center will amount to as many as nine people, focusing on “matters of particular importance to Swedish interests, China in Sweden and China in the Swedish neighborhood and the European Union.” Thematically, the center’s research coverage is kept intentionally wide: Chinese balance of power, foreign policy, international relations, research, technology and innovation, investments and corporate acquisitions, as well as matters of security and Sweden’s immediate neighborhood.

In order to manage such a wide-ranging set of issues, it will not only be crucial for the new center to exchange information with international counterparts including within the EU. It will be as important for all actors within the Swedish system – government agencies, civil society and business – to improve coordination on issues relating to China, as the strategy correctly points out.


Rebalancing EU-China Relations

This series explores the shifting strategic debate in the European Union and various member states over the economic and political relationship with China. 

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Solving Sweden’s China Puzzle

June 30, 2020
Jerker Hellström

Jerker Hellström is Director of the Swedish Center for China Studies. He previously headed the Asia and Middle East Program at the Swedish Defence Research Agency.