Swedish companies optimistic about future in China

Swedish companies are mostly optimistic about their business outlook in China, according to a new survey that was released on Thursday.

A joint initiative by the Embassy of Sweden in Beijing, the Consulate General of Sweden in Shanghai, Business Sweden and the Swedish Chamber of Commerce in China, The Business Climate Survey for Swedish Companies in China 2020 aims to analyze and understand the situation of Swedish companies operating in China.

The survey was conducted among member companies of the Swedish Chamber of Commerce between May and June, with 93 out of 183 eligible companies responding.

Up to 75 percent of the respondents believe that financial results this year would be negatively impacted by the COVID-19 pandemic. But almost two thirds believe that results will be on par with or above 2019 levels.

The survey also found that Swedish firms in the industrial and service sectors view the business climate as having weakened compared to last year. On the other hand, consumer firms have experienced a better climate compared to last year, citing the new business opportunities created by the strong e-commerce focus during the pandemic.

With regard to how the business climate will evolve, the majority of respondents were found to be optimistic. More than half (58 percent) believe that the climate will become more favorable over the coming three years, with large firms seeing a more favorable future than the small ones, and with consumer companies being more optimistic than industrial and service companies.

Looking ahead, 40 percent of the respondents are planning to increase their investments in China in the next three years, and almost half of the respondents are looking to increase or diversify their supplier base in China, or even shift suppliers from abroad to China. The main reason for this move is to access the Chinese market, according to the survey.

Swedish companies were also found to have an increased focus on reaching out to other markets – either through exports from China or by using China as regional headquarters.

This year marks 70 years of diplomatic relations between China and Sweden, and the start of the third decade of the Business Climate Survey in China, which was launched in 2000.