Country Profile: Sweden

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Sweden's relationship with China has deteriorated rapidly in recent years. Several factors contribute to this decline: the extensive coverage by the Swedish media of human rights issues in China, as well as Sweden's robust democratic institutions and strong protection of freedom of speech and the press, which foster a negative predisposition towards Chinese authoritarianism. 

The detention of the Swedish citizen Guimin Hai has further strained the relationship. Beijing's adoption of 'wolf-warrior' rhetoric has not helped to improve the relationship, notably Ambassador Gui Congyou's statement "we treat our friends with fine wine, but for our enemies, we have shotguns" in response to Gui Minhai receiving the Tuscholsky prize in 2019. According to the Pew Research Center, Sweden holds the most negative perception of China among EU countries, with 85 percent of respondents expressing unfavorable opinions. 

Economy

China is Sweden’s largest Asian trading partner. Sweden mostly imports IT machines, ships for transporting people, toys and electric lamps from China and exports medicines, cars, paper, and iron ores. In 2022, Sweden’s imports from China amounted to EUR 13.40 billion, 6.97% of total imports, and exports to EUR 6.74 billion, 3.59% of total exports. In 2022, lithium-ion batteries became one of the top five imports from China. 

Sweden is not among the top destinations for Chinese investments in Europe. In 2020, Chinese investments in Sweden amounted to 2.41percent of the country’s GDP and outward investments 1.7 percent. The main sectors attracting Chinese investment are automotive, industrial machineries, health and biotechnology, ICT, and electronics. Zhejiang Geely’s acquisition of 82 percent of Volvo cars and 8.2 percent of AB Volvo (truck producer) were cumulatively Sweden’s largest Chinese investments.

Sweden has shown more interest in the de-risking debate but is still not abandoning its famed liberal economic agenda. Sweden’s screening mechanism for foreign direct investments was adopted in 2021, later than most European countries, and its scope is limited to security transactions and assets.

Politics

China has acquired a more central role in Sweden’s foreign policy. Sweden has historically attached great importance to human rights, so their erosion has become a core issue in the political bilateral relationship. Since 2015, when Gui Minhai, a Swedish book publisher, was abducted in Thailand and imprisoned in China, the bilateral relationship has got dramatically worse. The last meeting was in 2019 and there have been no high-level meetings since.

In 2019, the Swedish government adopted a white paper on China, which called for better knowledge and understanding of China and for Swedish stakeholders to improve their communication and coordination.  It proposed the creation of a Swedish National China Center, launched in 2021. 

Security

Sweden has signed no extradition treaties with China or Hong Kong. According to MERICS data, in 2021 Sweden granted 285 licenses for dual-use exports, 27 percent of all the licenses granted, and denied only 14. 

The 5G debate has important implications in Sweden. Ericsson is Swedish, and one of Huawei’s main competitors (along with Finland’s Nokia) in 5G technology and services. Second, Sweden is one of the few European countries to ban Huawei from 5G development there. It shows how a country that relied on Chinese vendors for 75 percent of its 4G network development can still phase them out in 5G networks. Nonetheless, the decision by the Swedish Post and Telecommunications Board (PTS) has faced pushback. Both the government and Ericsson’s CEO were concerned about possible repercussions for Sweden and for Swedish companies. 

Society

Overall ties between China and Sweden have been decreasing, in line with other developments. The small Chinese diaspora grew marginally, from 21,855 people registered in Sweden in 2019 to 23,951 in 2020. Chinese tourist visits fell to 0.03 percent of the total in 2021 from an equally marginal 0.63 percent in 2019. Chinese students were 6.58 percent of foreign students in 2019 and 5.78 percent in 2022. Sweden’s only Confucius Institute has been closed. 

Public opinion surveys found 80 percent with unfavorable views of China in 2021, an intensification from 70 percent unfavorable in 2019.

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This MERICS analysis is part of the project “Dealing with a Resurgent China” (DWARC) which has received funding from the European Union’s Horizon Europe research and innovation programme under grant agreement number 101061700.

Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union. Neither the European Union nor the granting authority can be held responsible for them.