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Ambassador Gui Congyou Gives Exclusive Interview with SVD on China-EU and China-Sweden Trade and Investment Cooperation and Pandemic Response Cooperation

On 27 May, Ambassador Gui Congyou gave an exclusive online interview with Birgitta Forsberg from SVD on China-EU and China-Sweden trade and investment cooperation and pandemic response at the Embassy.

Q: There is a fear that there will be a big wave of Chinese investment into leading European companies. Some EU officials said it is possible that China may take advantage of the pandemic to buy European companies. What is your view on that?

Ambassador Gui: Such a fear is totally unnecessary. The history of world economic development is a history of openness, exchange and cooperation among countries. The growing open exchanges and cooperation among countries not only boosted their own socio-economic development, but also promoted the development of the whole world. China and the EU have long been each other’s major trading and investment partners. EU countries, including Sweden, actively participated in China’s reform, opening up and economic development, making positive contribution to socio-economic development of China, which we welcome. Every year, China attracts hundreds of billions of dollars of foreign investment including from the US and European countries. Such investment plays an important role in promoting China’s economic and social progress. As China grows economically, a large number of well-positioned leading Chinese companies emerged. These companies want to go global and invest in Europe, which helps EU countries’ economic growth and job creation. The EU also gained a lot from Chinese investment.

However, Chinese companies’ investment in Europe, since its peak in 2016, started to drop continuously. Chinese investment in Europe in 2019 decreased by about one third compared with 2016. There are a number of reasons behind the fall. First, economic growth in EU countries has been slowing down in recent years. In 2019, the economic growth rate in 27 EU countries was 1.4%, which made it less appealing for Chines companies to invest in Europe. Second, in recent years there has been overregulation by EU countries on Chinese companies’ investment, which also affected such investment. As China embraces a new round of opening up, foreign investors are accorded with more favorable conditions, including pre-establishment national treatment and simplified administrative procedures. We welcome EU companies, including Swedish companies, to expand investment in China, and hope EU countries including Sweden will continue to oppose protectionism, eliminate implicit discrimination against Chinese companies, and ensure equal treatment in market access, qualification accreditation, government procurement, project application and standard formulation.

So far I have not heard of any Chinese company that will take advantage of the pandemic to acquire EU companies. If there are some Chinese companies that come to Sweden or EU countries to conduct acquisitions, it is just normal business behavior and voluntary corporate behavior. The Chinese Government has no such policies, and neither is it possible for the Chinese Government to direct a company to acquire a Swedish or EU company. Cooperation among companies, be it Chinese investment in Sweden and the EU or the other way around, needs to be conducted by companies in keeping with market principles. Any investment not in keeping of market rules, including the so-called “acquisitions taking advantage of the pandemic”, is not sustainable. As Chinese people often say, one should not take advantage of another’s distress.

Q: There are fears that Chinese companies’ investment in the EU aims to take technology to China. What is your comment?

Ambassador Gui: International technological cooperation is an important driving force for global technological advancement. Cooperation between high-tech companies also needs to be conducted by companies as the entities following market principles. The Chines side supports cooperation between Chinese and foreign high-tech companies, and at the same time vigorously protects intellectual property rights with a series of strict measures. As I told Swedish friends on multiple occasions, if a Swedish company found a Chinese company violating its intellectual property rights, it can totally file a lawsuit at China’s intellectual property rights courts. We need to support normal cooperation between companies, instead of putting up fences.

Q: What about investment reciprocity? You mentioned Chinese companies can invest in Europe, and European companies also should have reciprocal rights to invest in China.

Ambassador Gui: Investment from Sweden and other EU countries in China contributed to China’s economic growth and improvement of living standards, which we welcome. As China pursues high quality economic development and 1.4 billion Chinese people are seeking a better life, China needs more foreign investment including that from the EU. Recent years saw the Chinese Government spelling out a series of measures to open up wider and attract foreign investment, including pre-establishment national treatment for foreign companies and opening up sectors such as insurance and automobile to investment of wholly owned foreign enterprises.

We are also aware that some Swedish business people want there to be completely reciprocal investment conditions in China. Undoubtedly, that is the overall direction that China’s economic development and open cooperation is moving towards. However, for us to remove all restrictions on foreign investment in some sectors, frankly speaking, is still difficult, because there is still a big gap between our two countries in the quality and level of economic development and market maturity. It is just like a 100-meter race, you started early and we started late, so it is neither realistic nor fair to ask you and us to reach the finishing line together. Per capita GDP of Sweden already exceeded USD 50,000, whereas that of China just reached USD 10,000. There is still a big difference. In terms of opening up markets to each other, what is important is for us to work towards the same direction.

Q: Are you worried that the criticism on China’s early epidemic response will affect Chinese investment in Sweden?

Ambassador Gui: An epidemic could happen in any country or place at any time. The history of humanity is a history of fighting and defeating various epidemics. COVID-19 cases were first reported in Wuhan, China, but it does not mean Wuhan is where the virus originated. Origin tracing is a scientific and professional matter that needs to be studied by scientists. This is a very cunning and contagious virus that caught us by surprise. Scientists around the world, including from China, still have not got to the bottom of it. They are still in the process of trying to learn more about it. To criticize or accuse China for its early response is not fair. For example, H1N1 was first found in the US and Ebola was first found in Africa, but their origins are still not determined. With the most comprehensive, strict and thorough measures, the Chinese Government contained the epidemic within about 70 days, contributing tremendously to global pandemic response. Building on this strategic achievement, the Chinese Government is taking further measures, including testing about 10 million residents in Wuhan. It is these most comprehensive, strict and thorough measures that put China in a position to be ready to resume trade, investment and people-to-people exchanges with other countries. I believe there is shared confidence among the business communities around the world in resuming business cooperation with China. If you want, after taking adequate precautions, you and your colleagues are also welcomed to report in China.

Q: What is the role of Mr. Ambassador and the Embassy in helping Chinese companies find investment projects in Sweden?

Ambassador Gui: Part of the job of the Chinese Government and Chinese embassies is to provide service for the cooperation between Chinese and foreign companies. When it comes to the companies’ specific business in Sweden, the Embassy never interferes with it. At the Embassy, our job is first about providing consular services to Chinese citizens and companies, to protect their legal rights and interests. Our job is also about reminding Chinese citizens and companies to abide by local laws and regulations, and ensure their investment activities in Sweden are in keeping with Swedish industrial policies. Third, we encourage Chinese companies in Sweden to get along with and contribute to local communities. In fact, I personally do not even have a full grasp of what Chinese companies are in Sweden and what businesses they are in. Business operation is conducted by companies, which I as ambassador and my colleagues do not interfere with. Ambassadors and diplomatic missions of all countries are diplomats and diplomatic organizations, not commercial organizations.

Q: Mr. Ambassador, you may not be part of it, but do your colleagues help Chinese investors screen Swedish companies and help them find business partners?

Ambassador Gui: All embassies have officials whose responsibility is business cooperation. Their main duty is to understand the economic situation and policies of the hosting countries, to provide information consulting services and policy guidance for companies from their home countries and help them build bridges. But the commercial officials will not make decisions for the companies. At the end of the day, corporate investment is business behavior, and it is the companies that take responsibility for their own profits and losses.

Q: Sweden adopted investment screening laws to protect its national security. What do you make of it?

Ambassador Gui: First, every country has the right to defend its national security. However, we oppose abusing the concept of “national security” on trade and investment issues, or using “national security” as a pretext to interfere with normal business cooperation. A couple of days ago, I read on Swedish media that Tele2 is rolling out 5G with Huawei equipment, and Swedish Minister for Energy and Digital Development Mr. Anders Ygeman saw no problem with having Huawei in Sweden’s 5G network. As a matter of fact, the 4G networks in most major countries around the world are already using Huawei, and I never heard any country’s security was affected because of that. The US accusations of Huawei are all speculations instead of facts. We firmly oppose restricting normal cooperation between companies under the pretext of national security, and firmly oppose some countries using so-called “national security screening” to target a specific company. We need to let facts speak, not speculations or suspicions.

Q: China is selectively open to some foreign business people. I know German business people are allowed to enter China. Will Swedish business people also be allowed? Is there a timeframe for that?

Ambassador Gui: The pandemic that caught all of us by surprise had severe impacts on all economies including Sweden. It also restricted trade, investment and people-to-people exchanges. As the epidemic gets under control in China, we hope to resume cooperation with trade and investment partners as soon as possible. Considering the epidemic in most countries including Sweden is still not effectively contained, we hope to resume trade, investment and travels as soon as possible after taking thorough precautions. Through friendly consultations, China and the ROK have opened a “green channel” or “expressway” of trade, investment and travel. The Chinese side is in discussion with its major trading partners to establish similar mechanisms, to create conditions for our business and people-to-people exchanges to be resumed. China is Sweden’s 8th largest trading partner, and Sweden is China’s largest Nordic trading partner. Given the epidemic situation in Sweden, it is not realistic to wait till all COVID-19 cases are eliminated to resume exchanges, neither can our companies and investors afford to wait. We are willing to work with the Swedish side to actively explore a creative way to resume exchanges under the precondition of observing strict precautions. The Chinese side is willing to provide support and help in terms of testing equipment and personnel.

Q: By “under the precondition of observing strict precautions”, do you mean Sweden’s epidemic response or Swedish business people that are going to China?

Ambassador Gui: What I mean is that to resume trade, investment cooperation and people-to-people exchanges as soon as possible, our two sides need to work out a creative solution to prevent import cases. Regarding Sweden’s response to COVID-19, first I want to stress that China always stands for non-interference, and we support the response efforts by Swedish Government and people. We know some countries have sharp criticisms on Sweden’s strategy. But we believe each country has the right to choose measures suited to its own national conditions. We want to express sympathies to the people affected by the epidemic in Sweden, and extend deep condolences to every loss of life. We hope Sweden will defeat the virus soon, and the Chines side is willing to continue to provide support and help to Sweden within our capacity.

Q: The US and China are respectively Sweden’s 7th and 8th largest trading partners, and they are not far apart on the list. Do you think China may surpass the US in its trade volume with Sweden?

Ambassador Gui: I never made such a prediction. Whether China will surpass the US to become the 7th largest trading partner of Sweden depends on Chinese and Swedish entrepreneurs and investors. It is not up to us, and we do not have such a goal. Given how President Trump fervently wants to keep “America First”, let’s just hope the US will keep being the first, so it won’t be so obsessed with suppressing China and other countries.

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