Sweden’s Sino-Strategy

Sweden and China have had turbulent relations over the past two years, with a number of public diplomatic rows. Yet relations remain mostly good between the two countries, and they are increasingly dependent on one another for foreign trade and investment. In October 2019, the Government of Sweden unveiled its China strategy. The strategy broadly reflects the 2016 EU China strategy, which all member states were expected to implement nationally, but the global political context has changed somewhat since 2016. And there are a few key distinctions in the Swedish policy, with some actions planned for Sweden alone. We believe, however, that Sweden will continue to engage with China through multilateral forums, such as the EU, on the most sensitive diplomatic issues through multilateral forums such as the EU.

Setting the stage for Sweden’s Sino-strategy

On 2 October 2019, the Swedish Government presented its China strategy to the Riksdag. Although Sweden’s China policy is meant to be harmonised with the 2016 European Union policy on China, the opposition has wanted to see a Sweden-specific strategy and to see that the Government does not rely too heavily on the EU for its cues in managing Swedish-Chinese relations. The plan was published three years after the EU set forth a five-year strategy for China, and it comes amidst a tense global and bilateral political situation. China’s importance in world affairs is increasing, and while the Swedish economy is deeply intertwined with China’s through global value chains, there have been several years of tense relations between the small Nordic country and the mammoth People’s Republic.

The EU strategy on which Sweden’s strategy is based is heavily focused on trade issues, which must be read in the wider global context of the US-China “trade war” that has been raging almost continuously since President Donald Trump took office in January 2017. The Government’s own strategy notes that China is now Sweden’s largest trading partner in Asia and its eighth largest trading partner in terms of trade in goods. The Government reports that approximately 10,000 Swedish companies trade with China, and more than 600 Swedish companies are established in China. Any deterioration in China’s economy due to trade wars with third-party (non-EU) countries could certainly affect Sweden’s economic vitality. It thus makes sense that there is a heavy commercial focus in the strategy.

Although successive Swedish governments have differed relatively little on most major foreign policy issues in the past two decades (with notable exceptions, like the recognition of Palestinian statehood and NATO membership), significant domestic political changes are underway within China. President Xi Jinping has been noted in the Western press for radically reshaping the Chinese bureaucracy, cracking down on corruption, and consolidating his hold on power. At the same time, the human rights situation in China has deteriorated i in recent years. Human rights is a priority in Swedish foreign policy, especially under the current Social Democratic-Green government, which has reinstated the at-large position of Ambassador for Human Rights, Democracy and the Rule of Law.

Relations have often been tense with China in recent years, although Sweden has proceeded cautiously. According to scholars at the Swedish Institute of International Affairs (UI), Sweden has, until now, been “active but careful when promoting human rights, democracy and the rule of law in its relationship with China. The Swedish Government has sought to keep a low profile by bringing sensitive issues within the European Union framework and seeking out cooperation on less contentious areas such as environmental protection and labour rights.” Relations have been strained in recent years, largely due to the Chinese imprisonment of publisher Gui Minhai, a Swedish citizen. Yet Sweden has stuck mostly to criticising China only in joint statements with the EU and other multilateral forums. In late 2018, China experts at UI predicted increasing criticism of China from Sweden’s business, media and political elite could lead policymakers to reevaluate earlier China policy and to promote political values more explicitly. Sweden has indeed made an explicit unilateral call for better human rights protection in China, mentioning Gui Minhai in the 2019 strategy. However, the policy adheres rather closely to the overarching EU framework for foreign relations with China, and we do not expect Sweden to depart radically from its prior preference for acting multilaterally when criticising China.

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UI scholars have also written about the strain on Sweden-China relations due to reports that since early 2018, the Chinese Government and its embassy in Stockholm have been conducting an intense campaign of public criticism of Swedish media outlets, journalists, scholars, human rights activists, political parties and authorities. The authors of a report on the subject hypothesise that such a campaign could be part of a strategy to pressure Sweden to be more accommodating towards Beijing’s concerns and to reduce public criticism for the Gui Minhai case. However, the authors noted that the opposite effect has been achieved, with worsening public opinon of China in Sweden.

Several other diplomatic rows have strained relations with China over the past two years. In September 2018, Chinese tourists, who showed up a day prior to their booking, were refused accommodation at a Swedish hotel. Swedish police became involved in the escalating incident, leading the Chinese Embassy in Stockholm to publicly criticise the “brutal” treatment of its citizens at the hand of Swedish police. That same month, the Chinese Embassy also demanded apologies from Sweden’s state-owned broadcaster, SVT, over content that was considered offensive for mocking Chinese culture.

Although the October 2019 China strategy was published against this contextual background, Sweden already had policies dealing with China’s ascendance extensively for some time. In the February 2019 Statement of Government Policy in the Riksdag Debate on Foreign Affairs, former Minister for Foreign Affairs Margot Wallström (S) indicated that the Government was in the process of developing a strategy and placed it in the context of both multilateral trade interdependence and the delicate human rights situation in China. She stated:

“China’s stronger international position brings both opportunities and challenges. Trade with China creates both jobs and growth in Sweden. The democracy and human rights situation in China is very serious. The Government is working on developing a new China strategy. But the winds of protectionism are blowing ever stronger. The trade conflict between the United States and China is a threat to the multilateral trade order.”

Foreign Minister Margot Wallström (S)

After taking over for Wallström in September, Ann Linde (S) has not yet focused on China issues. Her UNGA speech in September mentioned Israel, Palestine, Russia, Ukraine, the European Union and a range of topical issues, but she did not comment on any issue particularly pertaining to China, saying only that Sweden was

committed to finding threats to the international trade order. Yet on the same day, the Government published its China strategy, and Linde gave an interview to Svenska Dagbladet with several harsh words for China, calling its ascendance “one of the biggest global changes since the fall of the Berlin Wall.” Linde criticised the Chinese Embassy in Stockholm for its accusation that Swedish journalist Kurdo Baksi had lied and undermined Sweden-China relations. She also defaulted to multilateral institutions as a forum for criticism, stating, “When it comes to human rights, we always address it in our contacts with China, and in the UN Human Rights Council” and that the question of sanctions for minority rights abuses was a matter for EU member states to decide collectively.

Sweden’s China strategy: content of the policy document

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Our analysis of the strategy

Europe, Multilateralism, and China

The EU’s strategy on which this document is based is heavily focused on trade and economic issues, but it also covers nearly the full spectrum of relevant foreign policy issues that are included in the Swedish plan. In

addition to specific initiatives in the plan, the EU strategy lays out several key policies providing the general framework for EU-China relations (with which Sweden is in lock-step), such as the “One China” policy concerning the Republic of China and the People’s Republic of China and the “one country, two systems” principle for mainland China and Macau and Hong Kong.

Sweden’s 2019 strategy does not deviate significantly from the 2016 document. Sweden goes further on the issue of China and development assistance to push for the reclassification of China as a non-recipient country for aid (although most discussion of aid in the EU strategy is in the context of donor-to-donor partnerships with China, rather than China as a recipient). We anyways feel that Sweden’s particular decision should be unsurprising, given that Sweden phased out all development assistance to China in 2013.

The Swedish strategy is committed, across virtually every issue area highlighted, to some degree of engagement with China at the EU level and/or through other multilateral channels. Although there are proposals for new and continued bilateral foreign policy initiatives, such as on CSR, Sweden continues its tradition (discussed above) of engaging on the most delicate foreign policy questions, i.e. human rights in China, through its participation in international organisations, especially the EU.

One distinction in the Swedish strategy is the call for establishing a knowledge centre on China in Sweden. The strategy is not clear on what this centre would look like. One could envision several options, such as a stand-alone think tank, a research unit within the Ministry for Foreign Affairs, a “virtual centre” or loose amalgamation of researchers working on China in Swedish academia or something altogether different. Think tanks tend to be funded through government budget allocations or private fundraising, while academics in Sweden tend to have to compete for research funding from the Swedish Research Council (Vetenskapsrådet). There is also already a plethora of Asia and China experts in Sweden, some of whom already effectively work at “centres” of knowledge, including the Asia Programme at UI and the Forum for Asian Studies at Stockholm University. It remains to be seen how the Government will build up this centre, what will be the source of its financing, and whether its research output will be more “applied” or academic. It may be prudent to draw on existing resources in Sweden (something akin to the virtual centre option, with research grant funding), as establishing a new physical centre and staffing it fully will be time-consuming and subject to parliamentary budget negotiations next year.

One may also question whether Sweden’s policy comes perhaps too late. The EU strategy is more than three years old and predates the 2016 US presidential elections that upended the global trading system. The EU policy was meant to last for five years, meaning that in a year and a half, Europe will likely draft a new policy that Sweden will have to implement nationally, while the 2019 Swedish document outlines many actions that have yet to be taken. Sweden’s push to establish a knowledge centre also calls into question whether the country should have generated more knowledge about China sooner and whether it lags behind other member states who have already been producing research on China (a full assessment of which is beyond the scope of this article).

What’s in the strategy – and what’s missing

Sweden’s strategy was developed in consultation with industry and experts on China, which perhaps explains a heavy focus on trade and economic issues, which permeate most sections of the strategy (e.g. technology and innovation; research and education). Such issues are naturally a major concern for these stakeholders, especially for industry. It is also worth noting that the Swedish Ministry for Foreign Affairs has recently advised Swedish firms to “keep an eye on China” in order to understand the future of the labour market given China’s unique vision and planning for its enormous workforce.

Clearly, Sweden views China not only as a trading partner but as a potential model for learning about policy innovations. Although Sweden’s China strategy maintains a commitment, especially through multilateral institutions, to promote human rights protection in China, Svenska Dagbladet notes that “the democracy drive that was central to the government’s foreign policy declaration is not as clear in the new strategy.”42 Indeed, we find that the Government’s strategy mentions democracy almost exclusively in the phrase “human rights, democracy and the rule of law”; yet the specific policy proposals delineated focus much more heavily on human rights without any specific actions planned for pushing for democratization in China. Our search of the Government’s Drive for Democracy programme website – a Ministry for Foreign Affairs initiative for promoting and protecting democratic institutions worldwide – also yielded almost no explicit mentions of China. Thus while Sweden may have concerns regarding human rights in China, we expect the Government to pursue narrower issues like minority rights and to downplay the push for democracy, especially when engaging in bilateral talks with China. The Chinese authorities may be sensitive to both criticisms, but minority rights would seem less like a threat to their hold on power than talk of changing the electoral system. We also anticipate a continued focus on engagement through institutions like the EU on such issues.

Additionally, while human rights concerns factor heavily into Swedish public perceptions of China, we expect that the importance of the trading relationship with China will trump concerns over human rights, especially in bilateral discussions. Sweden can be expected to continue pressing for the release of imprisoned Swedish citizens and better treatment of Swedish journalists, but Sweden is unlikely to press China too hard on more sensitive domestic issues, such as Tibetan independence or democratisation, given the importance of Chinese trade and investment for the Swedish economy. We make this forecast with an eye to the precarious situation of Sweden in the global economy, which many experts are expecting to slip imminently into recession. Economic stability – and the many Swedish jobs that depend on economic ties with China – will be a significantly more pressing concern for the Government over the coming year.