Dragon News 2010 No 3

ANNIVERSARY
1
95 0
0-201
M e M b e r M ag a z i n e fo r Sw e d i S h C h a M b e rS o f Co M M e rC e i n h o n g Ko n g a n d C h i n a
CELEBRATING 60 YEARS
OF SWEDEN-CHINA
DIPLOMATIC RELATIONS

No.03
2010

Opinion
6
More expensive
rMb or higher
wages?

18
Executive Talk
from a ‘one-man
show’ to a global innovative
solutions for a
market leader

Feature
22 sustainable China
a Sinologist Successful Swedish companies have always had a
takes over at the keen ear for trends. Being innovative has become very
Swedish embassy important for foreign-owned companies in China today.

Publisher
Swedish Chambers of Commerce
in hong Kong and China
CONTENTS No.032010
For advertising inquiries, please contact
respective chamber’s office
4 editorial 6
The opinions expressed in articles in Dragon News
are those of the authors and do not necessarily 6 opinion: ari Kokko
reflect the views of the publisher.

Editorial management, design and printing 8 Snippets
bamboo business Communications Ltd
Tel: +852 2838 4553 10 Cover story: innovative solutions for a
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www.bambooinasia.com
sustainable China
bamboo@bambooinasia.com
18 executive talk: roger Samuelsson,
art director: Johnny Chan
designer: Victor dai
ShL group
10
INQUIRIES
Swedish Chamber of Commerce in hong Kong 20 feature: Paulo fohlin represents hK in russia
room 3605, China resources building
26 harbour road, wanchai, hong Kong
Tel: +852 2525 0349
22 feature: Lars fredén new ambassador
e-mail: chamber@swedcham.com.hk in beijing
web: www.swedcham.com.hk
general Manager: eva Karlberg
Marketing Manager: Märta Lang
26 Young Professional interview:
administration Manager: Maria Tornving Petra ringström
INQUIRIES 28 Chamber activities in hong Kong
22
Swedish Chamber of Commerce in China
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beijing 100028, People’s republic of China
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32 Chamber activities in Shanghai
e-mail: beijing@swedishchamber.com.cn
web: www.swedishchamber.com.cn 34 Cross-border mentorship programme
general Manager: Yvonne Chen
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administration & finance assistant: Jaycee Yang
36 new members
26
Shanghai Contact 42 Chamber.com
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Mobile: +86 1368 179 7675 46 The chamber and i: Kristofer heimby
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46 board of directors

Swedish Chamber of Commerce in Hong Kong Swedish Chamber of Commerce in China

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DRAGONNEWS • NO.03/2010 3

EDITORIAL

Mats Harborn Stefan Rönnquist

The new Chinese
Chairman Chairman
Swedish Chamber of Swedish Chamber of
Commerce in China Commerce in Hong Kong

melting pot
Dear Reader, The recent dynamism of the new Chi- nese policy of stimulating the creation of
nese melting pot has probably surprised the electric vehicles has the potential to have a
The theme of this issue of Dragon News Chinese leaders as well. Two decades ago it tremendous impact on the whole automo-
is how Sweden and China meet in innova- was not like this. Back then, they designed tive industry. Chinese companies have made
tion. This is a very interesting subject, and it schemes to “force” localisation of foreign impressive progress in the field of batteries,
reflects the integration between China and production and technology. which in combination with western con-
the world that has taken place in the past 10 For example, in the 1990s, the telecom cepts of complete vehicles can give birth to
years. industry was pressed by the Chinese authori- completely new combinations to the benefit
The opening up to the world that fol- ties to increase localisation of their products both of individual car users and also to public
lowed China’s WTO membership and the or they would not be given full access to the transport systems.
attractiveness of China abroad have meant market. This led to companies like Ericsson
that many more foreigners and Chinese are and Nokia inviting their foreign first and Swedish companies and individual en-
meeting in China than perhaps ever before. second tier sub-suppliers to set up production trepreneurs have been active in China for over
These connections have led to new ideas and in China. There were also political demands 100 years. Together with Chinese colleagues
to innovation. A new kind of dynamism is for foreign companies to increase their R&D and friends many new ideas and concepts
being born right before our eyes, and it is pos- activities in China. have been born over this century of collabora-
sible that we cannot quite fathom the extent At that time most companies set up R&D tion.
of it. activities rather reluctantly and under pres- Erik Nyqvist was a Swedish geologist
China has again become a new global sure. who spent 50 years in China during the first
melting pot, which is in fact not new to half of the last century. He helped estab-
China. As early as the Tang dynasty (618-907 Since then, China has become a very lish modern geology as a science in China,
AC) the then capital of China, Chang’an, was interesting place as a market and as a supplier and that has been behind discoveries of the
a cosmopolitan city where ideas, religions and of first-class staff for a number of sub-suppli- country’s coal and ferrous resources – two
philosophies met. The Tang dynasty was also ers in almost all industries. Similarly, many in- of the foundations of the present economic
one of the most important Chinese cultural ternational companies now establish advanced boom. Meanwhile, the Swedish Dairy Train-
peaks. China is bound to reach such a peak R&D here. The combination of foreign ing Centre in Beijing in the 1980s helped lay
again. companies’ leadership, R&D and the highly the foundation for the modern Chinese dairy
Culturally, China is already a melting pot intelligent and active brains of their local staff industry.
of influences from all over the world. Music, is very conducive to commercial R&D. The The future will undoubtedly see many
art, theatre, literature and so on already Chinese government no longer needs to either more such breakthroughs emerging from
abound with new and interesting ideas that threaten companies or encourage this trend – the convergence of Sweden and China, and
would have been unthinkable only a couple of it now happens by itself. we will keep you posted on them in Dragon
decades back. On a concrete note, the ongoing Chi- News.

4 DRAGONNEWS • NO.03/2010

The past decades of Chinese economic growth are
not only characterised by impressive aggregate
growth rates, but also by an unequal distribution of
the gains from development. Instead of a gradual
RMB appreciation, China needs an internal rebalanc-
ing process, says Professor Ari Kokko.
TExT: Ari Kokko, ari.kokko@hhs.se

Chinese rebalancing:
More expensive RMB
or higher wages?
G
lobal trade imbalances have played The first argument has to do with the stability of
an important role for the recent financial financial markets in the short to medium term. What
crisis in the US. China’s strong export would happen if China announced that the RMB will
competitiveness is one of the explanations become significantly more flexible? How many inter-
for the large deficits in the US economy. By fixing the national investors would expect the RMB to depreci-
RMB exchange rate and investing a large share of its ate? The answer is zero. It is easy to predict that very
current account surpluses in the US, China weakened substantial amounts of capital would flow to China to
two of the mechanisms that would normally have been take advantage of the “fool-proof ” exchange rate gains
part of the adjustment process: the US dollar did not that would follow. This would not be very beneficial
depreciate enough, and American interest rates did not for the EU, where several countries are already strug-
rise enough to reduce the US deficits. gling with deficits and debt stocks.
Although China does not figure prominently in The inflows of speculative capital to China would
discussions of the European crisis, it is clear that global also have undesirable effects on China’s macroeco-
imbalances are important here as well. The EU imports nomic stability. So far, China has managed to sterilise
more Chinese goods than the US and the EU’s trade inflows of foreign capital and control the growth of the
deficits vis-à-vis China have been almost as large as money supply. It would be more difficult to do this if
America’s in recent years. While Germany and other the RMB began to appreciate. Instead, the money sup-
Northern European countries managed to adjust to the ply would grow and inflation would be hard to avoid.
challenges from China, several countries in Southern Many foreign investors would not be content to place
Europe did not, with large deficits in trade and domes- their RMB funds in state banks or government bonds,
tic savings-investment balances as a result. but would rather look for investment opportunities
with higher expected returns. Real estate and stock
Against this backdrop, it is no wonder that there markets would certainly be strongly affected.
is heavy pressure on China to allow increased exchange
rate flexibility. In particular, US commentators have Secondly, it is unlikely that an international
argued that China is manipulating its exchange rate programme centred on the value of the RMB would
and have called for protectionist measures unless the be sufficient to restore global balances. The deficits in
RMB is allowed to appreciate. both the US and Europe are partly related to domestic
But is a gradual RMB appreciation the best way savings-investment imbalances. Neither the US nor
to handle the current global imbalances? Somewhat Greece will be able to reduce their external deficits
PhoTo: iStockphoto

provocatively, I would like to suggest that the answer without forceful measures to reduce domestic aggregate
is no. There are several reasons why Europe should demand: while Greece has recently introduced a no-
perhaps not call for an appreciation of the RMB, but table austerity package, there are no signs of anything
rather an internal rebalancing program in China. comparable in the US.


Thirdly, it is not clear that a strong RMB
would result in a less competitive China.
China might be able to adjust to a stronger Chinese workers are severely
currency just as Japan did in the 1980s, when
the yen appreciated strongly against the US underpaid, taking into account
dollar. Chinese labour is not only abundant,
but also increasingly well educated. Invest- the development level of the country.”
ment capital is abundant. Combining these
resources, China could perhaps raise labour
productivity rapidly enough to take the edge tion, health, and pension expenditures), and that large Chinese surpluses will be reflected
off an appreciating RMB. Given the absence limited access for private small and medium by large deficits in other countries, which may
of independent labour unions, China might firms to the formal financial system (which eventually spell trouble also for China. Hence,
even be able to reduce its nominal wages (or forces them to finance their investments with avoiding excessive current account surpluses
keep wage increases lower than inflation) us- retained profits) are a few examples of other should be in the self-interest of China.
ing the argument that it is necessary to make policies and structures that contribute to high Apart from this, there are at least four
sacrifices because China is under attack from savings. arguments why China should be interested
external forces. An unavoidable consequence of low wages in internal rebalancing. Firstly, China can
and high savings is that domes- afford it. With well over two trillion RMB in

0.5
The fourth and most signifi- tic private consumption is low. reserves – which presently have very low social
cant argument is that the really As a result, goods produced in return – programmes to raise welfare expen-
remarkable distortion in the Chi- China have not been consumed ditures are not excessive for China. Secondly,
nese economy is not the underval- in China, but rather exported. At internal rebalancing would be welcomed
ued exchange rate, but rather the China’s so called the same time, private demand for abroad. A slow adjustment process should not
low wage share of GDP: it stands gini coefficient, import goods has been depressed. be undesirable even for the US, considering
at one-third and has been falling which measures This is where global rebalancing how difficult it would be for the US to reduce
for 22 straight years. Chinese income inequal- should focus. By raising private its twin deficits rapidly – nobody is interested
workers are severely underpaid, ity, is approaching consumption and reducing in a very abrupt reduction in US aggregate de-
taking into account the develop- 0.5, which is a level domestic savings and investment, mand. Thirdly, it would be popular in China.
ment level of the country. matched only by China would reduce its current Several generations of Chinese have made
The low wage share is related some Latin ameri- account surplus and the current unprecedented sacrifices, both under central
to the lack of independent labour can countries. account deficits of its Western planning and during the last decades, when a
unions, as well as the emergence trade partners. In practice, this relatively poor population has set aside half of
of Chinese state capitalism. Not would call for new policies in sev- its income for savings and investment. Higher
even the most repressive capitalist regimes are eral areas. Higher minimum wages, independ- wages and increased public investments in
able to reduce the wage share of GDP below ent worker representation in wage negotia- social welfare would be warmly welcomed by
50 per cent. In the Chinese case, it has been tions, and increases in social expenditures – the great majority of Chinese citizens.
in the interest of the party and the state to education, health, housing, and pensions – are
generate high savings to support the export some reform examples. These reforms would Fourthly, and most importantly,
and investment led development strategy. The result in higher domestic demand, which China needs an internal rebalancing process
50 per cent savings rate seen today has been would eventually raise Chinese price levels, as badly as the world needs international
achieved using the exchange rate as one of constituting a real appreciation of the RMB. rebalancing. The past decades of Chinese
many instruments: state-owned enterprises economic growth are not only characterised
and banks that routinely reinvest profits (rath- Why would Chinese authorities be by impressive aggregate growth rates, but also
er than distributing them to private owners interested in an internal rebalancing process? by an unequal distribution of the gains from
who might use the funds for consumption), Do they have any motives to allow an increase development. The Chinese Gini coefficient,
strong savings incentives for households (high in the wage share of GDP? At the very least, which measures income inequality, is ap-
private expenditures for predictable educa- it should by now be clear for Chinese leaders proaching 0.5, which is a level matched only
by some Latin American countries. There are
increasingly large gaps between coastal areas
Professor Ari Kokko shares his time between Stockholm and and inland provinces, between cities and
Copenhagen, with frequent research trips to east asia. he is di- rural areas, between social groups, between
rector of the China economic research Centre at the Stockholm those with education and those without, and
School of economics, and runs the Centre for international busi- increasingly also between men and women
ness and emerging Markets at Copenhagen business School. (since the lack of public alternatives puts the
Currently, he is trying to understand the growth and interna- burden of elderly care on the household, i.e.
tionalisation of Chinese state-owned enterprises. in the past, the women). These gaps constitute a threat to
he has been a member of the board of directors of the Swedish social stability and “harmony” – recent events
international development Cooperation agency (Sida), chairman in Thailand demonstrate some of the unde-
of a Swedish government inquiry into the development of Swed- sirable consequences of a highly polarised
ish export competitiveness, and a frequent lecturer in various economy, where urban and rural groups live
executive education programmes. in entirely different worlds. b


I N N OvaT I v E S N I p p E T S

Swedish oats replace milk
n a majority of the people on earth are lactose-
Solar lamp for rural markets
intolerant and have to avoid drinking cow milk. oatly, n Solar energy technology has progressed lately, with
a Swedish company based in Landskrona, has found higher efficiency and lower prices. also light-emitting-
an alternative. oatly is a food company that focuses diode (Led) lamps have developed and become less
on research and development, marketing and sales expensive. The Swedish company hination has found
of oat-based products. a business concept to combine the two technologies
oatly has launched a range of dairy products made and develop a new energy-efficient solar cell lamp,
from oats rather than milk. all of its products are according to a report by the Confederation of Swed-
milk- and soya-free, and most of them are entirely ish enterprise about “innovations for the base of the
vegetable-based. The make-up of oats is perfect for pyramid”.
humans, and oat fibres help reduce raised cholesterol hination was founded by Linda Krondahl and the
levels. company was this year chosen by Kista Science

PhoTo: Sven Svensson for oatly
oatly’s research operations have strong links with City as one of the most promising clean technology
the Lund University, where the research began in the companies in Sweden. The original idea was to launch
1990s. oatly’s products are being marketed in some the solar cell lamps on the Swedish market, but today
20 countries. the focus has shifted to markets in africa, where the
according to a report by the Confederation of Swed- electric power supply is insufficient.
ish enterprise (Svenskt näringsliv), oatly is studying a cost-effective solar lamp could mean a lot for
whether the oat drink can be used as an alternative to smaller businesses in areas where the electricity
milk at schools in China. grids are not reliable. Shops could stay open longer
and people could do more work at home. normally,
QUOTE

kerosene lamps are used in off-the-grid locations, but
“Innovation in developing markets has less solar cell lamps are environmentally much sounder.
to do with finding new customers than hination’s lamps can also charge a mobile phone.

addressing issues of product acceptability,
affordability, availability and awareness.”
The conclusion, in an article in MIT Sloan Management Review by Jamie
Anderson and Costas Markides, titled “Strategic Innovation at the Base

PhoTo: Peder bollnert
of the Pyramid”

Top 10 inventions in human history
Did you know ... n in 2009, some 4,000 british people between 18 and 85
n … that Sweden’s capital, Stockholm, is the very first city to be designated
years were asked by Tesco Mobile to rank the world’s 100
a european green Capital by the eU Commission? The commission’s intention
most important inventions.
with the “european green Capital” is to improve the living environment in cities
Most of the items on the Top 10 list were expected to
and the environment as a whole by designating one city every year to be an ex-
be there. The wheel was voted no 1, the aeroplane no 2,
ample to others and to take the lead in this work by presenting good examples
the light bulb no 3, the internet, the
and sharing experiences, thoughts and ideas with other cities.
personal computer (PC) and the
“More than half of the world’s population live in cities, and in europe the
telephone was ranked at no 4,
figure is no less than 80 per cent. Cities therefore play an important role in im-
5 and 6 and penicillin at no
proving the living environment for citizens. This award represents an excellent
7. at no 9 was the flushing
opportunity to inform and inspire others about the good environmental work
toilet and at no 10 the
being undertaken by the city, the residents of Stockholm and companies,” says
combustion engine.
Stockholm’s mayor, Sten nordin.
but what invention
was ranked at no 8?
well, it was the iPhone!
Probably not even ap-
ple’s Ceo Steve Jobs
would claim that his
must-buy handset is the
eighth greatest inven-
tion of all time …


Catherine Gao – Deputy Branch Manager Shanghai Branch, Johan Andrén – General Manager Shanghai Branch
Michael Zell – Head of Greater China and General Manager Hong Kong branch
Amy Chen – Chief Representative, Taipei Representative Office
Michael Zell – Head of Greater China and General Manager Hong Kong branch

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O
nly some 10 years ago,
most foreign-owned companies
that invested in China were
building factories to get low
production costs for their products, which
mainly were exported. Today, the picture is
different.
Now there is more focus on finding or
launching innovative solutions and
products, which often go hand-in-
hand with corporate social responsi-
bility (CSR) and sustainability. Many
have also discovered that China can be a
good market to test new ideas.
However, innovations intended for the
Chinese market do not have to be similar to
those created and launched in more mature
markets in the West. In fact, the innovations
could be very different.

For many years, Western compa-
nies have developed products at home,
modified them and sold them to
emerging markets, a concept which
is called “glocalisation”. Now, some
companies are trying to do the reverse.
Glocalisation worked fine when rich

Innovative
solutions for a
sustainable China
Successful Swedish companies have
always had a keen ear for trends. Being
innovative has become very important for
foreign-owned companies in China today.
TExT: Jan Hökerberg, Bamboo, jan.hokerberg@bambooinasia.com


countries accounted for the vast majority of
the market and other countries didn’t offer
many opportunities. But those days are over –
thanks to the rapid development of populous
We have to be prepared to re-
countries like China and India and the slow- convert our production if that
ing growth of wealthy nations.
In 2009, General Electric (GE) announced is what is necessary to succeed on the
that the company would spend US$3 billion
over six years to create at least 100 healthcare Chinese market.”
innovations that would substantially lower Ulf Andreasson, counsellor for science and technology
costs, increase access and improve quality.
Two products were especially highlighted:
• A handheld electrocardiogram (ECG)
device that costs as little as US$1,000 and is So today it has become quite obvious tion if that is what is necessary to succeed
aimed for the rural Indian market. that companies have to think in different on the Chinese market,” says Ulf Andreas-
• A portable, PC-based ultrasound ways if they are going to become successful in son, science counsellor at the Swedish
machine for the rural China market that only emerging markets. embassy’s science office, which is organised
costs US$15,000, compared to US$100,000 Historically, Swedish companies have by the state agency Growth Analysis.
or more for regular ultrasound machines. been good in “thinking outside the box”. So many Swedish companies are now in
These products are revolutionary, and not Famous Swedish inventions include scientific China doing different things, ranging from
just because of their small size and low price. and industrial milestones such as the Celsius buying emission rights to designing lifestyle
“GE badly needs innovations like the thermometer, the propeller and the self- accessories or even exporting music. The
low-cost ECG and ultrasound machines, not aligning ball bearing as well as communica- common denominator is that they all have
only to expand beyond high-end segments in tion tools like the modern telephone, the found innovative solutions, many of them
places like China and India but also to pre- computer mouse and the software application, connected with the concept of sustainability.
empt local companies in those countries – Skype, which allows users to make free voice
the emerging giants – from creating similar and video calls over the Internet. Tricorona is a Stockholm-based
products and then using them to disrupt GE A large portion of the Swedish economy is company that was recently acquired by
in rich countries,” wrote GE’s CEO Jeff Im- today based on the export of technical inven- the UK-based Barclay Capital. It special-
melt in a recent article in the Harvard Business tions, and many large multinational corpora- ises in the sourcing, development and
Review. tions from Sweden have their origins in the trading of Certified Emission Reductions
“To put it bluntly: If GE’s businesses are ingenuity of Swedish inventors. (CERs) from greenhouse gas reduction
to survive and prosper in the next decade, they “One important explanation for why many projects in developing countries.
must become as adept at reverse innovation as Swedish companies have been successful is that “We look for renewable energy or
they are at glocalisation. Success in developing they have had a keen ear for trends. Here in energy-efficiency projects. We pay for the
countries is a prerequisite for continued vital- China, this has become very important. We project to be developed and registered as a
ity in developed ones,” he said. have to be prepared to reconvert our produc- Clean Development Mechanism (CDM)
project. We then buy CERs, which we
can sell on the market. We buy in China
and sell mainly in Europe and Japan,”
says Björn Odenbro, general manager at
Tricorona in Beijing.
“The CDM, like international emis-
sions trading, is a flexible mechanism in
the United Nations’ Kyoto Protocol. The
Many Swedish companies
flexible mechanism keeps the cost of mak-
have become successfuil ing greenhouse gas emission reductions low
because they have had a in Europe, while allowing industrialised
keen ear for trends, says
Ulf Andreasson of the
countries to contribute to emission reduc-
Swedish embassy’s tions in the developing nations,” he says.
science office. The Kyoto Protocol was signed by
all nations, except the US and Australia.
Under it, the so called Annex 1 nations,
PhoTo: Veronika Skärlund

typically industrialised nations, have
committed themselves to reduce their
collective greenhouse gas emissions by 5.2
per cent from the 1990 level by 2012.
“We have 108 registered projects in
China and about 200 active projects.


China is the major market since it is pos-
sible to make larger scale reductions here
compared to Europe and also [compared] to
other developing nations,” says Odenbro.
Success in developing countries
Most of the projects are hydroelectric is a prerequisite for continued
power and wind power, but there are also
waste-heat recovery, solar power, biomass vitality in developed ones.”
power and other types of projects in Trico-
rona’s portfolio.
Jeff Immelt, CEO of General Electric
The Kyoto Protocol expires in 2012 and
still there has not been any global agree-
ment on a follow-up, which means that the years, they have also won the Conran shops
market for CERs is slightly uncertain. in London and Paris as clients.
“We are more careful and selective In 2009, Chang & Biörck opened its
today. The European emissions trading sys- own first store, located at The Village, an
tem will, however, continue and we hope outdoor mall in Sanlitun, Beijing.
that there will be a political will to continue “We have had it in our minds for some
the fight against climate change under a Chang & Biörck time, since there are very few individual
new legally binding agreement. Emission has opened retail stores in China that offer designed
a store in
rights are a good and cheap way to reduce Beijing.
products for the home,” says Biörck, who
the greenhouse gas emissions and China is together with the other part-owners, India
in the forefront when it comes to support- Chang and Maria Lustig, are now thinking
ing clean development,” says Odenbro. “Very few of expanding the concept to other locations.
individual retaul
stores in China
Being innovative can also mean offer products for Innovative solutions emerge in many
finding a niche market that is not yet uti- the home,” says industries in China. When it comes to
Eva Biörck.
lised. When Chang & Biörck was founded exporting music, China is a market where
in 2003, the idea was to let established you need to have a totally different ap-
Swedish designers use the simplicity and proach compared to other countries.
functionality that define Scandinavian “In China, you can forget completely
design and combine it with their interpre- about selling CD albums; you have to find
tations of Chinese patterns and form. other ways,” says Anders Hjelmtorp, execu-
“We invited designers to go to China tive director of Export Music Sweden, an
and we visited local markets, where at that organisation owned by the Swedish music
time you could still find traditional forms,” industry, with a mission to develop and
says Eva Biörck, who is responsible for the increase the export of Swedish music.
company’s marketing and PR. The huge numbers of pirated CDs, the
One of the designers, Gunilla Lager- high levels of illegal downloading from the
hem Ullberg, who is one of Sweden’s most Internet and the lack of a functioning roy-
well known and respected textile designers, alty system are forcing the Swedish music
even found inspiration for one of her pat- industry to work in different ways in China.
terns from a Chinese sweet “We worked closely together with the
shop. Ullberg creates two other Swedish designers that work for Swedish consulate-general in Guangzhou
fabrics with tradi- Chang & Biörck are Marie-Louise Hellgren until its closure in 2009. We set up a web-
tional Chinese and Sara Ödman. The shapes of Hellgren’s site in Chinese dedicated to Swedish music,
materials. For bone teapots and teacups were inspired we arranged with a radio station to play
example, she uses by a visit to the altar at the Temple of Swedish artists and we brought musicians
silk mixed with Heaven. The saucers represent the sun and to different types of activities. It worked
linen to make the moon. Ödman, who has studied at the out very well,” says Hjelmtorp.
cushions. The Central Academy of Fine Arts in Beijing, Pop music has become popular in
was inspired by the parks and trees in the China, especially “kind and friendly” types
city and then created a kids’ wear range. of music with live stage performances. Live
Björn Odenbro at The line utilises a low-impact dye printed bands are much appreciated, especially in
Tricorona says that on organic cotton. Beijing, while other parts of China seem to
China is in the fore-
front when it comes The company got a kick-start in 2003, accept playback and sing-back performances.
to supporting clean when it was awarded a design prize at the Some Swedish artists have already made
developmen. Formex Fair in Stockholm. It won pres- themselves a name in China, including rock
tigious clients in Sweden, such as Svenskt band Soundtrack of our Lives and Sofia Jan-
Tenn, ROOM, House and NK. Over the nok, a jazz-influenced singer who performs

We’re not that exotic, really.
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You’ll find your local branch 7 781 kilometers from home.
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which dates back to 1820. We have 9.5 million private customers deposits and loans, trade finance, money market as well as
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and 650.000 corporate customers and our purpose is to promote foreign currency/RMB spot and forward trading. On 12 August
a sound and sustainable financial situation for our clients. Swedbank Shanghai Branch received the local currency license
Swedbank Shanghai Branch provides Nordic, Baltic and Chinese from the China Banking Regulatory Commission, CBRC.

Telephone: +86 21 386 126 00 Fax: +86 21 386 127 11
shanghai@swedbank.cn www.swedbank.cn

in the Sami language and does yoiking. Per Portén at the Swedish
ment. This is followed up by a weekend-
Most artists promote themselves Trade Council recruits long workshop in China that focuses on
through ring signals for mobile phones, as Chinese senior managers to CSR management in practice in China.
a management programme
there is actually a working system for royal- about CSR. The course concludes with seminars and
ties in China. The operators are, however, presentations given by the participants over
the big winners and charge at least 50 per a week in Sweden.
cent of the royalties - more, for example, The training is designed to make the
than in Europe – while the artist/song- most of common strengths, future potential
writer only gets 25 per cent. and the rapid growth that the participating
countries are experiencing – with corporate
For Sweden, it is important to give fu- social responsibility (CSR) and sustainabil-
ture Chinese leaders a better understanding of ity as the overall theme.
Swedish culture, values and management style. at the Swedish Trade Council in Beijing. “We have arranged this programme
The Swedish Institute (SI) has, together The ultimate goal of the training is to two times and will start a new programme
with the consulting company Enact Sus- build up an international robust network in February 2011,” says Portén.
tainable Strategies and the Swedish Trade of emerging leaders who can strengthen
Council (STC) in China, developed a relations and business ties between China The Chinese people are well known
management programme for select Chinese and Sweden in the years to come. to be great engineers. The 6,700-kilometre
senior managers. “We have seen great interest in this pro- Great Wall is one the greatest wonders of
“Sweden is at the forefront when it comes gramme among Chinese in senior managerial the world, and construction began during
to innovation and CSR. The main idea with positions. Among 200 qualified applicants, the Qin dynasty some 2,200 years ago.
the programme is to transfer knowledge and 20 were selected last year,” says Portén. But therein is a paradox. China is home
promote Sweden among highly educated and The programme comprises three weeks to some of mankind’s most important
internationally oriented Chinese individu- of intensive work spread over five months. inventions, but still today, in many areas,
als who are ‘rising stars’ in industry and the First, the participants go to Sweden for 10 they lack innovative skills.
public sector,” says Per Portén, project leader days to study CSR and Swedish manage- “We believe that the Chinese see


Sweden as an innovative country, since we misunderstanding, especially in China, that mobility or infrastructure.
are high on various rankings. However, can innovations always have to be technical. GE’s Jeff Immelt and his co-authors of
China manage to take another step up the “Innovation is much wider than that. the Harvard Business Review article men-
production chain and become an innova- We had design and education as themes tioned above, have dubbed this develop-
tive country; that is the 64,000-dollar- during the Innovation Week, which ment “reverse innovation”. Others call it
question,” says Andreasson of the Swedish surprised many Chinese who are mainly “frugal innovation” or “frugal engineering”.
embassy’s science office. thinking in technical terms. You can, for It is a whole new management philosophy
“If China can succeed with that, then example, regard IKEA and H&M innova- that integrates the specific needs at the bot-
the road is open for China to become the tive in the way they handle their distribu- tom of pyramid markets as a starting point
world’s largest economy. But innovation tion chains,” he says. and works backward to develop appropriate
is very much based on free and critical solutions that may be significantly different
thinking, and perhaps China does not have But what actually is innovation in from existing solutions designed to address
enough of that today,” he adds. China and other emerging markets? From a needs of upmarket segments.
In May 2010, a Sweden-China In- Chinese point of view, innovation could be In places where resources are scarce but
novation Week was organised in Beijing very different from what many Westerners needs are great, solutions have to be afford-
by the Embassy of Sweden together with a think. It could be innovations based on able, reliable, resilient, easy to distribute,
number of leading Swedish multinational their own culture for their own people. and easy to use. Consumers in these places
companies, the Swedish Chamber of Com- The Economist magazine explained, in don’t need the most complete, top-of-
merce in China and the Swedish Trade a special report on innovation in emerg- the-line, every-optional-extra product or
Council. The event included activities and ing markets, published in April 2010, that service: they need something quick, sturdy
high-profile speakers. these developments represent a reinven- and accessible, something tailored to their
“During that week, we could really tion of the product development cycle for restricted circumstances.
see the innovative China, people who are markets with very limited resources. Like “Frugal innovation does not mean that
prepared to think in new terms. They have Japan before them, which developed lean you sell products of low quality in develop-
often studied abroad and when they have production systems to compensate for a ing countries. Rather, it is applied where
returned home they get full support from lack of physical space and materials, India the economic perspective is more impor-
Chinese society,” says Andreasson. and China are developing production tant for a product than high performance,”
He points out that there is a widespread systems for buyers without much money, says Andreasson. b

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Please call me for more
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Ph: 13701325660
lily.wang@work-space.cn


From his headquarters in Taiwan, Swedish entrepreneur Roger
Samuelsson has built up a medical devices and technology
company which provide services to some of the world’s most
respected pharmaceutical and biotechnology companies.

From a ‘one-man
show’ to a global
market leader
R
oger Samuelsson was cils. “They bought quite a lot of rehabilitation company Pharmacia (now Pfizer), SHL con-
born in 1963 in Lerum, east equipment and they always paid on time, so tinued to grow and focused on advanced drug
of Göteborg, Sweden’s second I concentrated more and more on the rehab delivery devices such as auto injectors, pen
biggest city. Growing up in this area as my niche.” injectors and inhalers. Today, SHL has become
city, which is located by the sea, Samuelsson Riksförbundet för Sexuell Upplysning the global leader in the auto injector area with
learnt how to sail and developed his passion (RFSU), a non-profit organisation specialising approximately 50 per cent market share.
for boating as his favourite pastime. in sex education, also placed substantial orders “We do our own design and we develop
Later he moved to Mjölby (in the prov- to buy rehab equipment for elderly and disabled new products but we do not put our own
ince of Östergötland) to attend technical people. Then in 1988, after five years of travel brand on the products. We deliver them
upper secondary school in the nearby city between Sweden and Taiwan, Samuelsson to our clients and we export everything we
of Linköping. As a teenager, he had already finally decided that it was time to move to Asia. manufacture in our factories in Taiwan and
shown an interest in business and started to “We got started in 1989 and I worked China,” says Samuelsson.
import goods from Asia. Being interested very closely with my business partner to get SHL puts a strong emphasis on the
in sports, he began looking at sports and things going.” says Samuelsson. development and design of devices that can be
fitness equipment such as boxing gloves. He They started to hire people and the busi- safe, easy to use, aesthetically pleasing and ergo-
discovered that many of the equipment were ness grew. In the 1990s, Taiwan was one of nomic in addition to many other requirements.
manufactured in Taiwan, so he decided to the so-called “Asian tigers” and had witnessed As a result, one of the injectors, the Precision
visit. At 20 years old, he flew to Taiwan by a rapid industrialisation from the 1960s Pen Injector (PPI), was awarded with the
himself, visited factories and found products onward. “China had not opened up yet and prestigious Red Dot Design Award in 2009.
he could sell in Scandinavia. I had to choose between Hong Kong and
“I was looking at a lot of different things, Taiwan, but I chose Taiwan.”
from connectors and cables to basically any-
thing that would be profitable. I worked from
Sweden but at that time it was difficult because
In 1994, Samuelsson spoke with the
American pharmaceutical company Upjohn,
We do our
of the distance. I had to send punched tapes by who had their headquarters in Kalamazoo, own design
telex and the telephone lines were poor. I was Michigan. The parties agreed that Samuels-
never sure if they understood what I said, lead- son’s company could manufacture auto injec- and we develop
ing to many misunderstandings and I realised tors for Upjohn, and with that they became
I had to go there more frequently. After going the first big global customer. This jumpstarted new products but
there several times, I loved the energy and the company’s brand association with medical
excitement of the place and decided to spend equipment and devices and quickly led to the we do not put our
more time there.” he says. company promoting its name Scandinavian
Health Ltd (SHL) more actively.
own brand on the
One of Samuelsson’s main customers
in Sweden was Landstingets Inköpscentral
Fortunate to have the opportunity to work
with global companies such as Upjohn, which
products.”
(LIC), a purchasing centre for county coun- later merged with the Swedish pharmaceutical


The Precision Pen Injector (PPI) is designed to Samuelsson is happy that he moved to
deliver repeated small, but accurate, doses of a Taiwan and established the company there:
product that rejuvenates skin launched by the “It has never been a problem finding skilled
Swedish biomedical company Q-Med. people with experience here.”
Even though Samuelsson was not a man-
Samuelsson continued to broaden ager in Sweden, he thinks he inherited a Scan-
SHL’s range of products. Another group dinavian leadership style. “I believe I am quite
company, SHL Healthcare, was established easy to be with, even if I always demand results.
for healthcare related inquiries and projects. A But perhaps I am not pushing people too hard
factory was set up in China to place a stronger like managers from other countries do.”
focus on the manufacturing of rehabilitation He owns over 70 per cent of the company
equipments for hospital and home care. These and is the company’s major shareholder. The
products ranged from patient lifting slings to remaining shares belong to key staff in Tai-
alternative pressure mattress systems to many wan, Europe and the US.
other support surfaces. SHL has come a long way since a “one
As SHL received more requests from dif- man show” to the 1,500 staff global organi-
ferent companies around the world, Samuels- sation it is today. After many years of hard
son started to in-source many of the key capa- work, Samuelsson can finally squeeze in some
bilities such as computer numerical time for his leisure and passion for

50
controlled (CNC) machining, sea. Samuelsson’s ultimate goal is to
moulding, automation, tooling etc. combine business with his love for
By doing so, the timeline and qual- boating, by taking guests on special
ity of the project can be easily man- boating trips and giving them a
aged under one roof and stream- The ShL group unique experience.
lined. SHL slowly started to gain has about 50 per “I really love everything that has
reputation with these capabilities cent of the glo- to do with the sea and hope to share
Roger Samuelsson moved bal market for
and attracted customers that were my passion with my friends and
to Taiwan and established
his company after five interested in products that are more auto-injectors. business partners,” says Samuelsson.
years of travel technology-focused. This eventually
between Sweden
and Taiwan.
led to the creation of SHL Technologies. SHL continues to expand and develop
“We specialise in comprehensive breakthrough next-generation auto injec-
manufacturing services, advanced integrated tors to suit the need of customers and end-
engineering, prototyping and assembly. Our users. In addition to a new facility in Taiwan
team combines extensive industry knowledge, to house additional capabilities, SHL is also
in-house development and a broad range of building a brand new facility in Florida to
production capabilities with an efficient global provide key services such as final assembly,
operation network,” says Samuelsson. final packaging and related logistics.
Even though he has worked in Asia for SHL also launched its newest auto injec-
more than two decades, he has never been tor Molly in September, 2010. An extensive
afraid of his company’s products being copied. marketing campaign is currently taking place
“Auto injectors are not worth much if you with a dedicated website (www.meetmolly.
don’t have a medicine to put into them. It is like com), various promotional videos, and other
a car without petrol. Most of the equipment we materials to help customer understand the
use are designed in different parts of the world, design concept as well as the new business
making them difficult to copy,” he says. model. b

SHL Group gets many orders for
technologically advanced manufacturing.


The lawyer

In September, Paulo Fohlin, partner at Vinge my experience from Sweden and elsewhere to
be highly relevant to international disputes
law firm in Hong Kong, was invited to join a resolved in Hong Kong and Asia,” Fohlin says.
During his 22 years of experience, he
Hong Kong government delegation to Russia has come across contractual disputes within
a variety of industry sectors, as well as cases
to talk about international arbitration. brought by private international companies
against state governments.
TExT: Kristian Odebjer, kristian@odebjerlaw.com
As Hong Kong explores new opportunities

a Swedish lawyer
on the world stage in the wake of the global
financial downturn, it draws on its traditional
strengths, not only as a free market with a
functioning justice system, but also as a centre

represents hong Kong for professional services that thrives on the
availability of top talent from many different
countries. For some it might appear odd that

in russia
Fohlin, born in Brazil and raised in Sweden,
would represent Hong Kong in a bilateral set-
ting, but in reality it is perfectly logical:
“For historical reasons, Hong Kong has

W
hen a Hong Kong government enforced abroad than a court judgment. always been an international melting pot, and
delegation led by Chief Execu- Fohlin says that he was honoured to since I first arrived I have found the atmosphere
tive Donald Tsang travelled to participate in a forum like this: “I was invited of the Hong Kong arbitration community very
Moscow, Russia, for an official to participate in the Hong Kong delegation as welcoming. I see the fact that I was invited
visit in September, 2010, Advokatfirman a Hong Kong-based international arbitration to join the delegation as a sign of the open-
Vinge’s partner in Hong Kong, Paulo Fohlin, practitioner.” mindedness of the current administration.”
was asked to come along to tell the Russians He goes on to note that the fact that he
about Hong Kong’s emerging position as an is Swedish probably did not hurt: “Russian So what were Fohlin’s key takeaways
international arbitration hub. companies, like Chinese ones, have a long from Moscow?
Mr Tsang’s visit had been planned to history of opting for Sweden as their preferred “I enjoyed the lively debate between the
strengthen bilateral co-operation between arbitration venue in international cases, so it Russian participants during the conference
Hong Kong and Russia, promoting Hong would have carried some extra weight in Rus- session, ´Hong Kong: Asia’s Sourcing and
Kong’s advantages as a sourcing hub and sia to have a Swedish lawyer promote Hong Business Centre´, which revealed some of
a fund-raising platform for Russian firms, Kong as an arbitration hub.” their experience of Hong Kong and China-
and it came on the heels of the US$2 billion related business. The Russian interest in Hong
Hong Kong initial public offering by Russian Fohlin had his first stint in Hong Kong Kong was evident, and there are also highly
aluminium giant Rusal earlier this year, the in 1990 and returned in 2007 as Vinge’s first interesting opportunities in Russia for Hong
first ever IPO by a European company on the Asia-based arbitration expert. Since then he Kong investors and entrepreneurs,” he says.
Hong Kong Stock Exchange. has been actively involved in the Hong Kong There were also interesting developments
Core to Hong Kong’s pitch to Russia are arbitration community as a fellow of the on the trade and investment front:
the vast pools of capital in China and other worldwide Chartered Institute of Arbitra- “Hong Kong and Russia are now con-
emerging economies close to Hong Kong. tors and a committee member of its East templating a bilateral investment protection
In short, Hong Kong is positioning itself Asia Branch, which is headed out of Hong treaty. Such treaties routinely provide for the
as an equal to London and New York as an Kong. As a representative of the International right of investors to arbitrate potential treaty
international capital market. On the regula- Chamber of Commerce Hong Kong Arbitra- claims against the host government.” In other
tory side, part of Hong Kong’s attraction may tion Committee, Fohlin has been engaged in words, a Hong Kong-based company would
be that there is less red tape than elsewhere. the work of the Hong Kong Department of be able to sue the Russian government in an
The mutual “love affair” between Hong Kong Justice in connection with the drafting of a arbitration tribunal, and a Russian company
and Russia has brought direct Cathay Pacific new arbitration ordinance. would be able to arbitrate against the Hong
services to Moscow and the abolishment of ”International arbitration is performed in a Kong government. Great news indeed for an
mutual visa requirements. similar fashion around the world. I have found international arbitration practioner. b

Of importance is also Hong Kong’s
transparent legal system, which includes a test-
ed system for international arbitration. By way
of background, arbitration represents a form of
private court procedure typically preferred by
international businesses. Most executives prefer
the speedy, confidential arbitration process to
a drawn out court battle fought in the public
Paulo Fohlin talks with Wang Shunlong, managing Meeting with the Moscow Interbank Currency
eye, and an arbitration award is more easily director at Hony Capital Limited. Exchange (MICEx).


The ambassador

Sweden’s new ambassador to China, Lars
Fredén, has long experience of China, start-
ing in 1980. He speaks the language and
he even knows some classical Chinese. As
a diplomat, he was also much engaged in
the independence movements of the Baltic
nations 20 years ago and has written two
books on that subject.

a Sinologist
takes over
W
ith the appointment of Lars In 1980, he went to China to study
Fredén as new ambassador in Chinese at Shandong University in Jinan,
Beijing, Sweden gets a diplomat followed by a year in Beijing studying classi- In 1980, it
with a thorough knowledge of cal Chinese. This was shortly after the Third
China, based on several diplomatic assign- Plenary Session of the 11th Central Commit- was quite
ments in China and Hong Kong, and who tee of Communist Party of China in 1978
also speaks the language. He came to China had taken the decisions that launched China’s obvious which di-
for the first time in 1980 to study Chinese at reform and opening-up policy.
Shandong University. “In 1980, it was quite obvious which rection China was
Fredén has had a long diplomatic career
that has seen him mainly posted in Asia and
direction China was taking, but no one could
ever believe that it would go so far and as fast
taking, but no one
Eastern Europe.
“China has to feel comfortable with itself
as it has,” Fredén says.
He was one of only seven foreign students
could ever believe
and with the world. And the world needs to at the university and the living conditions that it would go
be comfortable with China. Everyone has a were very primitive in the dorm where he
self-interest in China succeeding,” he says. stayed. so far and as fast
“We were about 50 male students on each
Fredén was born in 1951 in the far north floor and on mine we shared seven water taps. as it has.”
of Sweden, but grew up in the capital, Stock- There was no heating and in Shandong it
holm, a city he knows well, especially since occasionally snows in winter. Many of the stu-
he worked there as a taxi driver in the 1970s. dents were former Red Guards who after the
Fredén went through the Swedish Army Inter- Cultural Revolution now were permitted to Back in Sweden, Fredén started his
preter School, known as an elite school, where take up studying. This was the lost generation career at the Ministry for Foreign Affairs. He
he studied the Russian language. of China, made good in the nick of time,” was first sent out to Beirut, Lebanon, and
“There, the students who did not make it Fredén recalls. then to Hong Kong, where he was vice consul
were kicked out, by the week. But few of us He remembers that many Chinese, during between 1984 and 1986.
were lazy,” says Fredén. these years, from 1980 to 1982, were full of When the Wade-Giles Romanisation sys-
After completing a Bachelor of Arts in belief in the future and relieved that the bad tem of transcription of the Chinese language
history at Brandeis University in Massachu- years had passed. “However, many were also was replaced by the pinyin system, foreign
setts in the US, he continued with university surprised and depressed when they realised ministries also began to change the spelling of
studies in Russian and Chinese in Sweden. how far behind Chinas was in all fields.” names and cities. Fredén was an active partici-


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Dragon News 2010 No 3