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?
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.
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.
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.
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.