pic:unctad.org
Due to a lack of cooler political news, the topic today is the Swedish Defense Research Industry’s report that came out this afternoon on how much China has invested in Sweden. It’s not peanuts.
You’ve driven, perhaps, a Volvo? Enjoyed some Oatley with your morning cereal? Seen a movie distributed by Filmstaden, or sung along to a favorite playlist on Spotify? These companies-of-Swedish-origin, and many more, are entirely, or partly, owned by Chinese companies. The purchase price of the biggest nine companies is 94 billion kronor (SvD.se/China).
Sweden isn’t the only supermarket where China’s shopping. Huge American companies like Smithfield and Hoover and AMC Entertainment and many (many many) more are also Chinese owned. Other countries’ businesses own US companies too, of course. Gerber, whose pureed peas have fed millions of American babies, is owned by a Swiss company.
But China isn’t Switzerland, mainly because it’s a major economic and political-system competitor with an economy controlled by the state with muscles they regularly bring to bear to sway, ignore, or break market regulations. US President Trump ordered companies to move their business out of China last August, but CNBC reports (here) that many companies were already on their way out. China, on the other hand, is not ordering its companies out of anywhere.
The Chinese telecom company Huawei’s forays into the 5G network being set up in the US has been stopped, also in Australia and Japan, due to security concerns. Two laws in particular were too worrisome to dismiss: one was the Chinese 2014 Counter Espionage law that said that companies could not refuse to provide information if or when the state security organ requests it; the second was the 2017 National Intelligence Law stating that “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law” (CNBC.com/China). Although Huawei has insisted they would never, ever, access their network for nefarious purposes, there’s still a niggling worry at the back of a lot of people’s minds.
Seemingly not in Sweden (although one must assume Ericsson has the corner on building Sweden’s 5G network?). Many European countries haven’t made a final decision on whether to allow Huawei a role in building their 5G network. But a change might be coming. Germany was all set to embrace Huawei, and have them build their 5G network, when just the other day, members of Merkel’s own party threw a monkey wrench in the works and refused to back her plan (FI.com/China). Surprise! There are worries that China will respond, at a time when Germany’s economy is not at its strongest.
Which only illuminates the economic issue. No matter how bad China might act, Chinese ownership of big companies distributed over different industries makes it hard for a country to protest. “Biotech, electronics and industrial products are the most common investments” reported Oscar Almén, one of the investigators at FOI.
When Minister for Culture Amanda Lind went ahead and presented the Swedish PEN prize to Gui Minhai, the Chinese ambassador was not pleased at all (see this post). Speculation is, that China’s refusal to distribute a Swedish film, Cold Case Hammarskjöld, as well as another Swedish film, is an act of reprisal (DN.se/China). If so, let’s face it, they clearly aren’t that mad at Sweden. But it’s still a jab. A 5G network is a much bigger issue. As is ownership of sensitive companies or building out Stockholm’s subway system. For more information on why Sweden always takes the lowest bidder’s offer, and where that can lead, see this post.