Distinguished Chairman Ulf Pehrsson,
Distinguished representatives of SCTC members,
Ladies and gentlemen,
Good morning! It gives me great pleasure to attend the working lunch with SCTC, and to exchange views with you on China’s economic and social development and the prospects of China-Sweden economic and trade cooperation.
Firstly, the momentum of China’s economic development is strong.
The 20th National Congress of the Communist Party of China (CPC) that was held last year has established the blueprint and strategy for China’s development in the next period, which made clear that the Chinese path to modernization is a path of peaceful development. This month, China has just convened the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), which elected the new leaderships of the state and the CPPCC, formulated a series of important policies and voted to adopt a series of important decision documents. They also unleashed a series of important messages, which once again presented the rationality, resilience and certainty of China’s development to the international community. While the NPC and CPPCC sessions focus on China’s development, they will also bring about important opportunities and positive impacts for companies from around the world including Sweden to develop in China.
The first is that China’s economy will pursue high-quality development as its goal. In 2022, China’s GDP reached about 18 trillion US dollars, growing by 3%, which is higher than most other major economies. Industrial added value exceeded six trillion US dollars and manufacturing added value exceeded five trillion US dollars, both are the highest of the world. Trade in goods rose by 7.7% and exceeded 6.3 trillion US dollars, ranking the first in the world for six years in a row. The export of green and low-carbon products like solar batteries, lithium batteries and electric vehicles grew by more than 60% over the previous year. Utilized foreign investment was close to 180 billion US dollars, hitting a new record. China’s foreign direct investment reached 146.5 billion US dollars, up by 0.9%. Digital economy was nearly 7.5 trillion US dollars, up by 10%. According to the Global Innovation Index released by WIPO in 2022, China moved upward by one spot to the 11th (Sweden ranking the 3rd). In addition, China has completed the construction of the space station. Airliner C919 is now in market operation. China also was the first to apply 5G in large scale. Energy Station “Deep Sea No. 1” realized the maximum operational water depth of 1,500 meters. China’s AI applications account for nearly 1/3 of the world. These all demonstrate the outcomes of China’s high-quality development.
As President Xi Jinping pointed out in the report to the 20th CPC National Congress, to build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development. The Chinese Government has set the economic growth target at around 5%, which pursues an appropriate increase of economic output while leaving room for effective improvement of its quality. It indicates the start of a new development cycle. Going forward, the focus of China’s development will be delivering better quality, and in particular, enhancing the capacity for scientific and technological innovation, building a modern industrial system, and promoting the transition toward green development. The new Premier of the State Council Li Qiang, when meeting the press, summed up the prospect of China’s economic development as “it will break winds and waves, and sail toward a brighter future”, which I believe is very fitting. The development of China’s economy is bound to bring about more business opportunities for companies around the world including Swedish companies.
The second is that China will continue to deepen reform and opening up. In recent years, in a world that has been experiencing surging protectionism and de-globalization, the free trade system underpinned by rules is taking a hit. China has always been an advocate and promoter for free trade, and has been constantly opening up wider to the world. According to the World Openness Report 2022 jointly compiled by the Institute of World Economics and Politics of the Chinese Academy of Social Sciences and the Research Center of the Hongqiao International Economic Forum, China’s openness ranking increased by 5.6%, up eight spots, from the 47th to the 39th in the world.
As Premier Li Qiang recently remarked, reform and opening-up is a crucial move that has made China what it is today. In the historical process of advancing Chinese modernization and realizing the second centenary goal, we must continue to firmly pursue the path of reform and opening-up. He also stressed that opening-up is a basic state policy for China. No matter how the external situation may evolve, we will stay firmly committed to pursuing this policy. China will only open itself wider to the world, and provide a better environment and better services to all.
You have all been engaged in cooperation with China for quite some time. You know very well about the China’s huge market, complete industrial portfolio, rich human resources and solid foundation for development. Despite the impact of three years of pandemic, the Chinese market is still the most popular destination for foreign investment. Going forward, China will adopt supporting measures including expanding market access, further implementing the national treatment for foreign companies and providing better services for foreign companies, so as to let foreign companies from around the world including Sweden share the institutional dividends of China’s high-standard opening.
The third is that the consumption market in China will unleash greater energy. Since China optimized and adjusted Covid-19 response measures, the consumption market in China has been gradually recovering. In 2022, the total retail sales of consumer products reached nearly 6.6 trillion US dollars. Among them, the growth momentum of the new type of consumption was relatively sound, with online sales of tangible goods up by 6.2% and off line retails on the rise. The consumption demand for improved and upgraded goods has been unleashed at a faster pace. The sale volume of new vehicles reached 26.864 million in 2022, up by 2.1%, which ranked the first in the world for 14 years in a row. Among this, the domestic sales of new energy vehicles increased by 93.4%, and export was up by 131.4%. New energy vehicles now account for 1/4 of vehicles in China, meeting the national target ahead of schedule by three years.
The rise of the huge Chinese consumer market will benefit foreign companies in China. According to the statistics of the Ministry of Commerce of China, over 90% of foreign companies in China mainly focus on the Chinese market. As new modes and new forms of consumption continue to emerge, the potential of the Chinese market will continue to be unleashed. This year, China puts the recovery and expansion of consumption as a priority. The Chinese market will further expand, and the momentum for investment by foreign business in China will also be stronger. In the future, the accumulated precautionary savings of the Chinese people is expected to gradually translate into actual consumption demand. With the launching and implementation of a series of consumption-stimulating policies, the effects of these policies will also gradually manifest. The cultural, creative, furniture, fashion, food, gaming and health products from Sweden are popular among Chinese consumers. I believe Sweden also has many more products made with advanced concepts and innovative technologies that can shine their unique charm in the vast Chinese market.
Secondly, China-Sweden economic and trade cooperation has a bright prospect.
As an old Chinese saying goes, it is better to travel thousands of miles than to read thousands of books. Over the past year, in order to better understand Sweden and to discover more opportunities for cooperation. I visited some provinces and dozens of Swedish companies, and communicated with hundreds of Swedish people from all walks of life. Among the companies are large enterprises and consortiums, as well as SMEs; both traditional manufacturers and booming industries like new energy and new materials. Each of these visits has left me with a deep impression. Looking back at the visits and exchanges with my friends from the Swedish business community over the past year, there are several deep impressions:
The first is that China and Sweden have common economic development goals, and are complementary in their development. China and Sweden both attach high importance to low-carbon and sustainable development, and both have formulated ambitious carbon neutrality targets. Both China and Sweden have formulated regional development strategies. China’s strategies of development of the central and western region and the revitalization of the northeastern region and Sweden’s strategy of developing its north have a common goal of achieving more balanced regional development. The industrial structures of China and Sweden have their own characteristics and strength. There is a strong mutual complementarity and promising prospects for our cooperation in green economy, ecological conservation, scientific and technological innovation and high-end manufacturing.
The second is that Chinese and Swedish enterprises have a strong willingness to carry out economic and trade cooperation. Both China and Sweden firmly support free trade, laying a solid foundation for practical cooperation between the two sides. At present, Sweden is China's tenth largest trading partner, third largest investment destination and second largest source of technology import in the EU. In recent years, more and more Chinese enterprises have come to Sweden for cooperation. The proportion of cooperation in new energy, EVs, modern agriculture, biomedicine, infrastructure and other fields has increased. For example, Chinese companies like Shenzhen Senior Technology Material, Shenzhen Kedali Industry and Wuxi Lead Intelligent are the supplier of lithium battery separator, housing and intelligent production line for Northvolt. Shanghai Putailai New Energy Technology is also joining them to cooperate with Northvolt on Graphite electrode production.
China is Sweden's largest trading partner in Asia. By the end of 2022, nearly 600 enterprises from Sweden had invested 6.43 billion US dollars in China with 1,855 projects. More than 10,000 Swedish enterprises engaged in trade with China. From my exchanges with Swedish companies, larger ones always attach great importance to the Chinese market and hope to see the sound and steady development of China-Sweden relations and deepening practical cooperation in various fields, so as to bring more benefits to the two peoples. Small and medium sized enterprises find it very reassuring to talk about business with Chinese counterparts, as the Chinese people are very pragmatic and always do more than they say. They also hope to have the opportunity to cooperate with more Chinese companies in the future for mutual benefits and win-win results. Mr. Peppino G. Cocozza has attended the Canton Fair for over 100 consecutive times since the first time in 1966, which is very touching. In the future, I hope to see more mutually beneficial and win-win projects to be carried out, and further deepening bilateral economic and trade relations.
The third is that China-Sweden economic and trade cooperation has great potential. In the cold northern part of Sweden, fossil-free steel-making and new energy battery plants are describing Sweden's booming green industry and the prospects for cooperation between Chinese and Swedish companies in green and low-carbon fields. In the busy Port of Gothenburg, colorful containers were speaking to me about the good momentum of China-Sweden trade development. According to the 2022 China Business Environment Report jointly released by Business Sweden, the Swedish Chamber of Commerce in China and the Swedish Embassy and Consulates in China, 72 percent of Swedish companies in China are making profits, ranking first in the Asia-Pacific region, up by 9 percentage points from the previous year. 61% of them said they would increase investment. A quarter have R&D activities in China, with the proportion of localized R&D increasing to 23% from 15% of the previous year. For example, Volvo Construction Equipment has achieved long-term and stable development in China since 2002, and China has become one of its four key sales markets in the world. I am confident that with the joint efforts of the business communities of the two countries, there will still be great potential for our cooperation in the future.
Today I come with two good news for you. I believe they’ll bring more benefits to China-Sweden economic and trade exchanges. First, China has resumed visa issuance. Starting from March 15, 2023, the review and issue of all types of visas for foreigners to China have been resumed, and the entry function of visas issued before March 28, 2020 and within the effective period have been resumed. Port visa authorities have resumed the review and issue of all kinds of port visas for legal reasons. Visa-free entry to Hainan province, visa-free entry for cruises to Shanghai, visa-free entry to Guangdong province for foreigners from Hong Kong and Macao have been resumed. Second, Air China has added flights to China. Since March 5, Air China has added two direct flights between Beijing and Stockholm every week, from one on Sunday to three respectively on Tuesday, Friday and Sunday. To further facilitate people-to-people exchanges between China and foreign countries, Air China is also actively studying the possibility of opening flights from Stockholm to Shanghai.
Thirdly, suggestions on expanding China-Sweden economic and trade cooperation in the future
The first is to further extend cooperation areas. At present, Swedish companies' investment in China mainly focuses on the manufacturing sector. I think you can also increase R&D activities in China in the future. As Jacob Wallenberg, president and chairman of the board of the Confederation of Swedish Enterprise has said, Many Swedish companies have long been rooted in China, not only because China is an important market, but also has increasingly become an R&D base for many companies, and its importance goes far beyond mere trade or investment figures. Earlier this year, China’s Ministry of Commerce and Ministry of Science and Technology promulgated the document entitled Measures for Encouraging Foreign Investment in Establishing Research and Development Centers, introducing 16 policies and measures to support scientific and technological innovation, improve the convenience of R&D, encourage the introduction of overseas talent and improve the protection of intellectual property rights, which will help Swedish companies better participate in China's innovation-driven development strategy and share the opportunities brought about by it.
The second is to further tap cooperation potential. Both China and Sweden are actively responding to the issue of climate change and share expectations for expanding bilateral cooperation in new energy, new materials, modern agriculture, biomedicine and other fields. Sweden is among leaders in the world in innovation capacity, has advanced scientific and technological development and a high degree of industrial modernization, and is striving to achieve its climate change goals. At present, our cooperation in new energy has started and we believe there is still greater room for expansion in the future. In addition, we also have great space for cooperation in the Internet, digital economy and other new economic sectors in the future. I hope our high-tech enterprises will focus on green development, constantly tap cooperation potential and enhance cooperation space through platforms such as the Sino-Swedish Smart City Conference. At the same time, we welcome Swedish high-tech enterprises and talents to make full play in China and reap their own success in China's new stage of development.
The third is to further foster a favorable atmosphere for cooperation. Amity between the people holds the key to sound state-to-state relations. China-Sweden economic and trade relations depend on the joint efforts of all sides to create a favorable atmosphere for cooperation. Creating trade and investment barriers for no reason, artificially setting up policy obstacles and distorting the positive side of China-Sweden cooperation are not conducive to bilateral cooperation. All the members of the SCTC are enterprises engaged in cooperation with China for many years. You have long rooted in the Chinese market and have a good understanding of China. I hope you will share with Swedish people from all walks of life the realities of China's economic development and tell more stories of win-win cooperation so that the Swedish people can have a clearer and more accurate understanding of China.
One of my favorite Swedish sayings is “Better a bird in the hand than ten in the forest.” It tells us to cherish and seize the moment. For China-Sweden relations, the takeaway would be that we need to promote cooperation in all areas where we can, and do better where there are win-win results. It is hoped that Swedish enterprises will continue to explore the Chinese market and expand investment and trade cooperation in China.
Finally, I would like to take this opportunity to thank all Swedish friends who have long been committed to promoting practical cooperation and friendly relations between China and Sweden. The Chinese Embassy in Sweden will, as always, provide assistance within our capacity to Swedish companies’ business development in China. I wish members of the SCTC to make new breakthroughs and progress in your China business.
Thank you all!