Northern potential

Sweden

There is a growing interest in Sweden's business community for doing business with China and also for establishing joint ventures with Chinese counterparts.

Trade

Trade between Sweden and China in-creased a great deal between January 1st and September 30th 1992, compared to the same period in 1991.

Exports from Sweden rose 79 per cent to US$245m and imports increased 28 per cent to US$435m, according to Swedish statistics.

0.8 per cent of Swedish exports went to China and 1.5 per cent of Swedish imported goods were made in China.

Telecom equipment made up 36 per cent of exported goods, aircraft made up 17 per cent and chemical products 6 per cent.

Clothing made up 44 per cent of the imported goods, electronic products 4 per cent i.e. radio and television sets and another 4 per cent covered foodstuffs.

Joint venture agreements

Four major joint ventures agreements were concluded during 1992.

Cewe Instrument established a joint venture in Beijing with Beijing Power Capacitor Factory.

Ericsson, the Swedish telecom manufacturer, signed two JV agreements: one in Nanjing for the production of radio base stations, the other in Guangdong for the marketing of mobile cellular systems.

IKEA, a Swedish furniture company, also concluded a JV agreement.
Hotel management

In late 1992, a Sino-Scandinavian hotel opened in Beijing. The Scandinavian partners are SAS (Scandinavian Airlines) and Skanska ? a large Swedish civil engineering company. The Scandinavian partners have the responsibility of the hotel's management.

The future

We at the Swedish-China Trade Council believe that trade with China will increase ? both in exports and imports.

Prospects are good for manufacturers selling to infrastructure projects ? Asea Brown Boveri, Atlas Copco, to telecom projects ? Ericsson ? to the transport sector ? Hagglunds' cranes and all-terrain vehicles, Saab Aircraft, Saab Auto-mobile, Saab-Scania Trucks & Buses, Volvo cars, trucks and buses, to the food industry sector ? Alfa Laval, Frigoscandia, Tetra Pak, to the health care sector ? Elekta and Getinge, to the pulp and paper industry ? Elof Hansson, Kamyr and SundsDefibrator, to the chemicals industry ? Boliden and Chematur.

The prospects for exporting pulp and paper, as well as steel also look promising.

This report was compiled by Ulf Gerbjorn, general manager of the Sweden-China Trade Council in Stockholm.

Norway

The trade between China and Nor-way has developed solidly over the last decade. Since 1982, according to Norwegian government statistics, China has increased its exports to Norway by a factor of eight, while Norway has increased its exports to China by a factory of three. The result being that currently China exhorts about twice as much to Norway as Norway exports to China. This is likely to remain the situation for some time to come. The current trends are even more in China's favour, with a current three to one ratio in trade for 1992.

Our trade is dominated by a few commodities. Chinese exports to Norway are dominated by textiles and textile pro-ducts, being more than 60 per cent of ex-ports to Norway, with strong increases in foods and other consumer goods. The Norwegian exports to China are being dominated by the export of fertiliser, constituting more than 50 per cent of ex-ports. The remainder is primarily in the field of engineered products, covering a wide variety of products in the machinery and electronics field.

The Norwegian economy is very export-oriented with about 45 per cent of the GNP exported to other countries. In a small nation of only 4 million people the industrial sector is totally dependent on being able to compete internationally to survive. Our home markets are too small. It is therefore not unusual to see Norwegian companies exporting more than 95 per cent of their production.

The most likely sectors for increased exports from Norway to China are in the areas of engineered products and services.

Fish

Norway is the leading fishing nation in Europe~ with a 1991 fish catch of 1.9m tonnes. This has spawned a very active fishing gear and fish processing equipment processing industry. Although China is only importing marginal amounts of fish from Norway, as it modernises its fishing fleet, this should be a possible area for expansion of trade.

Shipping

Norway is one of the world's leading shipping nations, this area is becoming an area of mutual benefit. Norwegian ship owners have had Chinese shipyards build several large ships for them, at the same time Norwegian shipping equipment suppliers have been able to sell their equipment to the Chinese ship owners and shipyards building for other foreign owners.

Offshore oil industry

This is a relatively young industry in Norway. In its 25 year history it has developed into the leading nation in off-shore technology, based on the challenging conditions in the North Sea. Last year Norway became the fifth largest oil exporter in the world. During the initial stages of the Chinese offshore oil industry there was a lot of contacts between Chinese and Norwegian authorities and companies. With the exception of equipment suppliers to the ship operations side of the oil business, cooperation in this field has lately been very limited.

Hydropower

Norway is an energy rich country, with its electricity supply entirely based on hydro power. This has been the basis for Norway's strong position in metallurgical industries. Norway is the western world's leading supplier of products like silicon metal, ferro silicon, magnesium, calcium carbide and as number two in products like aluminium, ferromanganese, and silico manganese. These products are very rarely sold to China, and as a matter of fact, this is one of the few areas where there is direct competition on the world markets between the two nations.

Environmental equipment

With the long shoreline and all the activity along the coast, be it fishing, off-shore oil developments, or shipping, the Norwegians are concerned about their environment. Norwegian companies have developed a range of cleaning and monitoring equipment. The manufacturers have to date done very little business in China, but hope to gain from China's growing environmental awareness.

Infrastructure

Like China, Norway is very mountainous with a long and complex coastline, making infrastructure development very Difficult and expensive. Norway has invested a great deal in developing new products to tackle the situation.

Telecoms equipment from Norway is being installed in several provinces in China. Instrument landing systems (ILS) from Norway will be installed at many Chinese airports over the next few years. Other companies are installing air traffic control systems and snow removal equipment.

Norwegian shipping expertise has produced advanced harbour and river traffic supervisory systems as well as high speed passenger vessels.

The future

The bulk of Norwegian companies working in the Chinese market are generally small companies with less than 100 employees. Their most serious problem is the cost of getting started in the Chinese market, having very little money to market themselves. For this reason, most companies are too small to be able to afford to have a full time representative in Beijing or elsewhere in China.

Future trade has many possibilities for an increase, and in many fields. From Norway the emphasis will be on advanced technology in a variety of fields, and associated engineering services. The Chinese exports are starting to broaden its base with an increase being noted in the field of engineered products.

This report was compiled by Cornelia Horn of the Norwegian Trade Council in Oslo.*