In my previous blog writing I was talking about the fear of Finnish companies to collaborate with Chinese companies. That also influences the amount of Chinese FDI in Finland. According to the Invest in Finland there are only 17 companies in Finland that have more than 50 % share owned by Chinese. In Sweden the same number is close to 100. According to the statistics of MOFCOM (Ministry of Commerce of the People’s Republic of China), the total Chinese FDI in EU reached USD 466,7 million in 2008. Germany received the biggest share of 39,3 % followed by the Netherlands with 19,2 % share. UK lost its more than 50 % share from 2007, gaining only 3,6 % share in 2008, whereas Ireland managed to attract 9,1 % share. Finland is not even mentioned in the list of Chinese FDI destinations. Does this mean we do not have interesting investment opportunities in Finland or the investment environment is not encouraging for Chinese investors?
China is investing in Europe due to its ”go global” policy implemented by the Chinese government. It has now the highest foreign exchange reserves in the world with amount of USD 2,44 trillion. China has been heavily reliant on USD, which has made China to aim at diversifing its currency portfolio. Just recently a Finnish economic magazine had a big title stating ”The capital is disappearing in Finland”. With my simple mind I am asking, should we not try to attract capital from there where there still is? Chinese companies are eagerly looking for new markets and growing opportunities. In Finland we have such Chinese ICT giants e.g. Huawei, BYD and ZTE. There would be more room for technology cooperation, if we would be more open to opportunities rather than trying to keep everything to ourselves. Finland cannot change the fact that Asia is going to have leading position in the world’s economy; already has. If we don’t learn to cooperate, we will be left outside of the development.
The major attractions in Finland for investors are considerably high productivity, skilled labour and transparency of the operations and operation environment. However, the production costs are shockingly high and the market very small. Yet, the government is lacking means to encourage investor and entrepreneur based immigration to Finland. Manufacturing in Finland is not profitable at all, so we should concentrate on developing the best services, new inventions and innovations to maintain our high rank in competitiveness. However, as we are a small country and the rest of the world is surrounding us, shouldn’t we utilize the diversity of the other countries and cultures in order to create something new that can be adapted in the global market? Maybe even create the next Nokia style success story. Better to be humble to those that might rule the world in the future. Therefore, I welcome the Chinese investors and entrepreneurs, skilled labour and bright students to Finland and let us grow along with the future leader.
Blog by Johanna Heikkinen 
Well well, thanks to my former colleague and my current dear friend Jyri, I received updated information on the Chinese investments in Sweden. By the September 2009, Invest in Sweden Agency (ISA) had assisted in completing 190 investment projects, out of which 160 led to establishing business presence in Sweden. I wonder what the figure is at the moment. Finland is really behind in attracting Chinese investments to land into Finland.
More information on investments in Sweden http://www.chinafair.org.cn/english/News/260240.html
Thanks Jyri!
It is interesting to compare the Chinese investment in Sweden to that in Finland. I just noticed that the Chinese business delegation prefers to visit Sweden rather than Finland, although the two countries are neighbors. In my opinion, there are some reasons. first, there are more old generation of overseas Chinese in Sweden than in Finland. The ties (Guan Xi) of the overseas Chinese in China may play an important role to the Chinese companies developing their business in Sweden. Second, there are more Chinese students in Sweden. Their potential influence is also big. They may play important role in Chinese business development in Sweden by their Guan Xi with Chinese companies. Or even they may be entrepreneur in China after graduate from the university. They also would make some investment if the business grow up. at the same time, they are familiar with environment. There may be more reasons for that phenomenon. Studying……
Dear Lingyun,
Thank you so much for your insightful opinions. The strong overseas Chinese ties in Sweden is a good point when considering the amount of Chinese investments in the country. Here we can see a good example of the meaning of guanxi. Though the diplomatic relations between Finland and China have existed for over 60 years, the bond in the personal level might have more impact on business in some cases. Or at least it smoothens the way and speeds up the activities. And when it comes to students, yes, there are more Chinese students in Sweden for sure. I think Finland is also realizing the importance of attracting smart and skilled Chinese and naturally other foreign students into Finland. Afterall, in the collaboration beyond the borders you need the gate builders that understand the characteristics of each parties. Please feel free to share more your ideas in the future as well. It is always very educational for me as well to hear other’s comments and opinions on interesting topics 🙂