Dragon News - No. 1, 2014 by Dragon News - Member magazine for Swedish Chamber of Commerce in China and HongKong

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M e m b e r M a g a z i n e f o r t h e S w e d i s h C h a m b e r s o f C o mm e r c e i n H o n g Ko n g a n d C h i n a

No.01

2014

Gilbert Van Kerckhove Water is China’s worst environmental problem

Narrowing the quality gap

Hanse Ringström China will speed up deregulation of banking

Sven-Göran Eriksson A manager with a democratic heart

China has lost some of its cost advantages and is seeking to move up the value chain of manufacturing. But even if some companies are narrowing the quality gap many are still cutting corners.

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CONTENTS

Editorial management, design and printing Bamboo Business Communications Ltd Tel: +852 2838 4553 Fax: +852 2873 3329 www.bambooinasia.com bamboo@bambooinasia.com Art director: Johnny Chan Designer: Victor Dai English editor: Chris Taylor Cover photo: iStockphoto INQUIRIES Swedish Chamber of Commerce in Hong Kong Room 2503, 25/F, BEA Harbour View Centre 56, Gloucester Road, Wanchai, Hong Kong Tel: +852 2525 0349 E-mail: chamber@swedcham.com.hk Web: www.swedcham.com.hk General Manager: Eva Karlberg Marketing Manager: Emma Cosmo Finance Manager: Anna Mackel

Helsinki

INQUIRIES Swedish Chamber of Commerce in China Room 313, Radisson Blu Hotel 6A, East Beisanhuan Road, Chaoyang District Beijing 100028, People’s Republic of China Tel: +86 10 5922 3388, ext 313 Fax: +86 10 6464 1271 E-mail: info@swedishchamber.com.cn Web: www.swedishchamber.com.cn Office Manager Beijing: Karin Roos Webmaster: Jaycee Yang Finance Assistant: Klara Wang

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6 Opinion: Gilbert Van Kerckhove 8 Snippets 10 Cover story: Narrowing the quality gap 22 Executive talk: Hanse Ringström

24 Young Professional interview: Björn Djurberg

28 Feature: Sven-Göran Eriksson 30 Chamber activities in Hong Kong 32 Chamber activities in Beijing

34 Chamber activities in Shanghai 36 Chamber activities in Taipei 38 Chamber news 42 News

43 New members 48 After hours 50 The chamber and I: Swedish and Chinese brands

Swedish Chamber of Commerce in Hong Kong

Swedish Chamber of Commerce in China

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4 Editorial

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DRAGONNEWS • NO.01/2014 3

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EDITORIAL

When it’s time to do business, we’re exceptionally open.

Katarina Nilsson Chairman Swedish Chamber of Commerce in China

Ulf Ohrling Chairman Swedish Chamber of Commerce in Hong Kong

High quality essential to brand building Dear Reader, From a Western perspective, quality is always an obvious concept when running an enterprise. Indeed, quality is a trade-off against price or quantity in most industries – the larger the production, the cheaper the price, which in turn lowers expectations in terms of quality. But with enlightened and conscious consumers in a business environment characterised by healthy competition, companies cannot ignore quality. In recent years, this has also started to take place in China and in the Chinese market. Traditionally, the quality of Chinese production exported to the West has been significantly higher than production intended for the domestic market. Quality requirements from overseas buyers are higher, and they are monitored through constant quality control. Quality awareness among Chinese consumers was in the past limited, but change is underway. As Chinese consumers

have increased purchasing power, they are also becoming more enlightened and have greater demands when it comes to quality. With access to more sources of information – especially social media – public opinion, perceptions and trends are changing faster than before. Trust and confidence in products and their components or ingredients are becoming increasingly important. However, such changes are taking place slowly, and at a varying pace depending on the industry in question. Moreover, companies with short-term perspectives tend to shirk making investments aimed at improving quality. From their perspective, it only adds unnecessary costs to the detriment of profits. Swedish firms in China are committed to the Swedish tradition of sustainability and durability. Quality is considered an essential part of building a brand and brand values. As quality is becoming more important in China and Chinese companies are slowly rising in the value chain, it is likely that

competition will become more intense in segments that Swedish companies typically operate. However, Swedish companies will be relatively well positioned to meet this increased competition, given their long history of building confidence, trust and brand values. Chinese manufacturing traditions are deeply associated with cost reduction as a means to short-term maximisation of profit rather than continuing improvements to products to achieve long-term and sustainable earnings. The importance of strong brands has become increasingly obvious to Chinese manufacturers but what is still lacking is the awareness of a clear link between high quality and effective brand building. This is an interesting area of opportunity for Nordic companies, designers, inventors or entrepreneurs to explore. Perhaps the time is ripe for new partnerships between Chinese manufacturers and Nordic players aiming at finding mutually beneficial ways of dealing with quality and brand building.

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4 DRAGONNEWS • NO.01/2014

TEXT: Gilbert Van Kerckhove, gilbert@strategy4china.com Photo: iStockphoto

China’s environment:

Gilbert Van Kerckhove is from Belgium, where he graduated with a Master’s degree in electronic engineering. Since 1980 he has been working with China. He is the founder of Beijing Global Strategy Consulting Co, Ltd. He has been assisting the Beijing authorities in the areas of economic studies and the promotion of foreign investment. He was deeply involved in the preparations for the 2008 Olympics and has received the Chinese government’s highest awards, and a green card. In 2012 he published his book Toxic Capitalism on environmental issues. More: blog.strategy4china.com

Water is the worst problem While air pollution in China receives a lot of media coverage, water is probably the most acute environmental problem, says Gilbert Van Kerckhove, a Beijing-based Belgian strategy consultant who recently published the book Toxic Capitalism.

he environment is getting the attention of the Chinese public. The government is well aware it is a serious pollution and has started to act. My book Toxic Capitalism gives an exhaustive overview of the state of the environment, the reasons for the gloomy situation and what we can do. The book criticises overconsumption and wastage caused by questionable companies, financial institutions and governments, all of which is leading to depletion of natural resources and environmental destruction. While air pollution receives a lot of media coverage, water is probably the most acute problem. China faces severe water challenges and estimates average per-capita water resources at only 2,100 cubic metres, or about 28 per cent of the world’s average. In key agricultural regions, such as the North, water resources stand at only 500 cubic metres. Two-thirds of Chinese cities suffer from water shortages, and 200 to 300 million rural residents lack access to safe drinking water according to official figures. In 2010, the China Daily noted China has 2.6 million square kilometres of deserts, 28 per cent of its surface, more than seven times the area of Germany. In 2011, the available per-capita water supply in Beijing had dropped to 100 cubic metres, well below the internationally accepted warning limit of 1,000 cubic metres per capita. In the past – say the 1950s – the city had abundant water sources; it even had to prevent floods from the Yongding River. To-

day the Guanting and Miyun reservoirs have no more than 10 per cent of the capacity they were designed to hold. Industrialisation and urbanisation are blamed. Statistics provided by the authorities show that the past 10 years have seen the water table of the capital dropping from 12 metres to 24 metres due to over-extraction of underground water, which is a major cause of land subsidence. Land subsidence is a problem in more than 50 cities in China. In the 1920s, land subsidence was limited to Tianjin and Shanghai, but by the 1970s it had spread to other cities. Parts of the countryside have started to sink too. Shanghai is among the most severely affected cities and has sunk as much as 2.5 metres in the past century. The city spends billions of yuan annually, pumping water underground to fight subsidence. The construction of skyscrapers and underground water extraction play major roles in the sinking of urban areas. According to the World Bank, China needs to effectively manage its water resources to maintain economic growth. Water shortages – already severe after successive droughts – have been aggravated by high waterconsuming industries, service industries, and wastage by households. Tariffs are too low, and water distribution networks are also often of very poor quality, generating important losses, and also leading to sinkholes. The problem of water resources was highlighted in the Second National Assessment Report on Climate Change: “Water, either too much or too little, lies at the heart of how that warming could tripup the country’s budding prosperity. Climate

change will lead to severe imbalances in China’s water resources. In most areas, precipitation will be increasingly concentrated in the summer and autumn rainy seasons, and floods and droughts will become increasingly frequent.” Shifts in crop patterns are expected. More rice and other crops will probably grow in the northeast, thanks to warmer weather and possibly more rain. In the northwest cottongrowing region of Xinjiang, shrinking water availability could lead to a marked decline in agricultural crop productivity, says the report. A report from HSBC says: “The business impact of China’s water shortage is already happening. Full stomachs and clean water to drink are top priorities for Chinese officials. Water scarcity was a partial cause of rising food prices. If the shortages worsened, banks might be compelled to lend substantial sums to tackle water problems.”

More than half the water in China is so polluted as to be undrinkable, and nearly a quarter is so toxic that it is unsafe even for industrial use.” Environmental Protection revealed that more than half the water in China is so polluted as to be undrinkable, and nearly a quarter is so toxic that it is unsafe even for industrial use. Water shortages and pollution affect agriculture, and China is no longer able to independently feed its own people, increasingly importing agricultural products. Air pollution is now also affecting photosynthesis and plant growth.

200-300 million

Coal still accounts for about two-thirds Water pollution is of China’s energy probably the worst consumption. The aspect of environcoal industry and mental degradaThe number of rural residents in China that lack the power plants also tion because of its access to safe drinking water. require enormous impact on daily life, amounts of water. agriculture, and Meanwhile, the development of fracking industry. China has 20 per cent of the world’s in China is seriously hampered by the lack of population and just seven per cent of its fresh water where deposits exist. water, but 70 per cent of China’s lakes and China is heavily investing in renewable rivers are contaminated, and half of its cities energy sources, including solar, wind, and hyhave polluted groundwater, according to the dro, but the challenges are immense, as it still World Bank. Lakes and rivers are severely needs more electric power. It plans to reduce polluted, with the Yellow River, the Yangtze its dependency on fossil fuels. Right now, over River, and Taihu Lake among the most pol90 per cent of the energy consumed in China luted in the world. comes from coal, crude oil and other largely A survey conducted by the Ministry of

carbon sources. Total energy consumed will gradually use more non-fossil fuels: • 2011: 8 per cent of non-fossil fuels • 2015: 11.4 per cent • 2020: 15 per cent • 2030: 20 per cent China is becoming the world’s largest importer of crude oil, and by 2030 it might have to import 75 per cent of its oil. In order to substitute coal with gas, massive imports are needed. As the “factory of the world”, China also needs a range of other resources and is actively securing mining rights all over the world. “China’s outward investment is in an important stage of accelerated development. The country will guide companies in making overseas investments and pursuing foreign mergers and acquisitions in industries, including energy, raw materials, agriculture, manufacturing and services in 2012,” said then Premier Wen Jiabao at the fifth session of the 11th National People’s Congress, in March 2012. What can be done? Massive efforts and investment are needed to improve the environment, but the major challenge will be to change attitudes. b

DRAGONNEWS • NO.01/2014 7

Q u a l i t y S n i p p ets

(per cent of global respondents that trust companies from a certain country)

Germany

80%

Sweden

79%

Switzerland

79%

Canada

78%

United Kingdom

75%

Japan

74%

Netherlands

71%

United States

68%

France

67%

Italy

55%

South Korea

54%

Spain

53%

Brazil

42%

Russia

38%

China

36%

India

35%

Source: Edelman

8 DRAGONNEWS • NO.01/2014

n After 17 years in China, the world’s largest retailer Wal-Mart Stores has changed its approach, closing some big-box stores and, instead, focusing on private-label products and imports with quality and safety stamps. Raymond Bracy, head of corporate affairs at Wal-Mart China, told the South China Morning Post that the company is rationalising its supply chain in China and building its own distribution centres to manage quality while also lowering costs. James Roy, an associate principal at Shanghai-based China Market Research, says that mainland consumers have seen mixed messages from Wal-Mart, because “they have tried to sell the ‘everyday low prices’ concept and Chinese consumers equate ‘everyday low prices’ with being cheap and not very safe.”

QUOTE

n Companies headquartered in BRIC nations continue to suffer a trust deficit compared to Western-based companies, according to the public relations firm Edelman’s 2014 Trust Barometer. Globally, respondents rated companies based in Germany, a market known for efficiency and productivity, highest (80 per cent) followed closely by Sweden (79 per cent) and Switzerland (79 per cent), both of which are known to have strong policies aimed at protecting the environment, employees and communities. Companies based in Mexico (34 per cent), India (35 per cent) and China (36 per cent) were trusted least and have seen no improvement over the past five years. This year’s Trust Barometer also shows a major disconnect between the view BRIC-based respondents have of their home-grown companies compared to the rest of the world. For example, trust of China-based businesses among Chinese respondents is 76 per cent, compared to 36 per cent globally and 21 per cent in the US. The 2014 Edelman Trust Barometer is the firm’s 14th annual trust and credibility survey. The survey consisted of 20-minute online interviews conducted in October and November, 2013. The online survey sampled 27,000 respondents from the general public, with an additional sample of 6,000 informed respondents aged 25-64 across 27 countries.

Wal-Mart adjusts approach to China

“In China, do not look for the cheapest supplier. The lowest quote will often be more expensive than the average quote.”

Multinationals face accusations n To defend themselves, the Chinese have been on the move to report poor quality among Western multinational corporations. US retailer Wal-Mart, French grocer Carrefour, McDonald’s and KFC’s parent company Yum Brands are enterprises that have come under fire in China over food safety issues. Coffee chain Starbucks has been accused of charging customers in China higher prices than in other markets, helping the company to realise thick profit margins. Apple, the maker of Mac computers, iPhones and iPads, has been accused for treating Chinese consumers differently compared to those from other markets by selling its products for higher prices. German automaker Volkswagen has been forced by China’s quality-control agency to recall more than 384,000 vehicles sold in China due to gearbox problems, following a critical state-run television report.

Renaud Anjoran in a blog at www.qualityinspection.org

Quality issues top consumer complaints in Guangdong n Problems concerning quality topped the consumer complaints Guangdong Provincial Consumer Council handled last year, according to the China Daily. “Guangdong Consumer Council handled 32,551 complaints involving quality problems in 2013, representing 27.55 per cent of the total and up year-on-year 37.29 per cent,” said Luo Weiguang, the council’s deputy director at a press conference in March this year. Luo said that the council dealt with more than 118,000 complaints from consumers in 2013, a figure that accounted for more than 21 per cent of the country’s total,” he said. The other complaints were mainly about service, contracts, prices, false promotion and safety. Most of the complaints were settled with mediation from the council, with 171 million yuan refunded to customers.

Photo: Apple

How companies rank on the trust scale

n … that China has a new consumer protection law? It was implemented on 15 March, which happened to be China’s Consumer Protection Day. It is the first major overhaul of consumer protection in China for 20 years. At the time of the last changes, China had no e-commerce, not many retailers and no big supermarkets. With the new law in place consumers will have the right to complain about poor-quality goods and the right to return goods after seven days. Class-action lawsuits, led by government consumer associations, will also be permitted.

Photo: iStockphoto

Did you know … Photo: Wal-Mart

Swedish companies among the world’s most trusted

Four Chinese virtues (1)

2009, Roger Malkusson got a phone call in Shanghai and was offered a new job at a newly established Chinese car company he had never heard of. Malkusson, a Swedish automotive veteran, had at that time worked four years in China for General Motors in its joint venture with SAIC and had a long background in the industry, working with Saab Automobile in Sweden. “When I found out that this was an offer to be part of a team that was going to build a totally new brand from the start, I became very excited. As an engineer, you want to develop as much as possible from a blank paper and not be forced to do what others already have done,” he says. The company that called was later to be named Qoros Automotive, and Malkusson became one of the company’s first 10 employees. Today, just five years later, the company employs more than 2,000 people, 250 of them foreigners, and has developed its first car, which, in 2013, sensationally was ranked as the safest small family car by Euro NCAP. It was the first time a car developed in China had achieved a five-star rating (see separate article).

Na qu rro al w ity in g ga t h p e

Even if many technologically advanced products, such as computers and mobile phones, are successfully manufactured in China for export, the country has long had a bad reputation for producing poor-quality products, especially for the domestic market. Consumers in China have increasingly lost confidence in homegrown brands. China might have become “the factory of the world” almost overnight,

China has lost some of its cost advantages and is seeking to move up the value chain of manufacturing. But even if some companies are narrowing the quality gap many are still cutting corners. Text: Jan Hökerberg, Bamboo, jan.hokerberg@bambooinasia.com

10 DRAGONNEWS • NO.01/2014

but we have seen repeated scandals involving tainted formula milk, contaminated pet food, dangerous toys, exploding kitchen gadgets and much more. “Chinese suppliers believe that what an importer doesn’t know can’t hurt him. They change product specifications without asking, and they believe that it is better to beg forgiveness than to ask permission. Quality is seen as a barrier to greater profitability and quality issues are not openly discussed,” wrote the business consultant and author Paul Midler a few years ago in a column in The Telegraph titled “Why ‘Made in China’ is a mark of shame”. In his best-selling book from 2009, Poorly Made in China, Midler mounted the expression “quality fade”, which is the quiet and incremental degradation of a product’s quality over time. According to Midler, Chinese factories transform profitless contracts into lucrative relationships. The production cycle he sees is the opposite of the model of continuous improvement. After resolving teething problems and making products that match specifications, innovation inside the factory turns to cutting costs, often in ways that range from unsavoury to dangerous. Packaging is cheapened, chemical formulations altered, sanitary standards curtailed, and on and on, in a series of continual stages of product degradation. It is, however, also a fact that China is capable of producing world-class quality in factories equipped with new and modern top-of-the-line machinery, and some of these factories employ international management systems. “In China, it is definitely possible to achieve high quality, but the customer must Chinese Qoros has got a prestigious safety award in Europe.

Over thousands of years of history, the Chinese have formed their own moral code that has played an important role in the social development and progress. These traditional virtues still have a great significance today, so for this year’s issues of Dragon News, the Swedish Chamber of Commerce has picked four of the virtues to serve as guiding stars for the cover stories: l (proper behaviour), xiào (filial piety), rén (benevolence) and dé (a power that shows the way). We start with proper behaviour, which in the context of a company’s culture could mean that you combat corruption, will be transparent and, not least, strive for delivering highest possible quality. Erspid quae.

also be prepared to pay for it. Owners and managers of the best factories in China know their value and spend a lot of time training staff to improve their skills,” says Eva Iding, managing director and owner of the Hong Kong-based Gekko Quality Solutions. Gekko is assisting customers in northern Europe to find suitable suppliers in China and helping them to improve quality, compliance and social responsibility throughout the whole supply chain. Iding came to China as early as 1986. She has been inspecting factories on the mainland for several decades, first while sourcing for Åhléns, a leading Swedish department store chain, in the 1990s, and since 2002 through Gekko. “You might think that there would be a big difference when it comes to quality between the 1990s and today. Yes, it looks better superficially today, but the difference is not that big. At that time there were both good and not-so-good factories and this is the same situation today as well,” she says. However, Iding says that the factories’ understanding of the customers’ markets has improved. “They are more experienced today when it comes to listening to clients’ requirements. Their management systems and their quality control have also improved, and they are working more actively on corporate social responsibility,” she says. Iding points out the importance for foreign-owned companies to be present and carry out quality control in their suppliers’ factories. “However, when the factory’s workload is heavy, production, or part of it, is actually still outsourced to another factory

DRAGONNEWS • NO.01/2014 11

Luxury with a Scandinavian touch Volvo cars made in China shall have exactly the same quality as cars made by the company’s factories in Sweden and Belgium. “We will never cut corners in our processes, because then quality can suffer,” says Volvo Car China’s design director Lars Falk. Later this year, the Chinese-owned Swedish car brand Volvo will launch a totally new technological platform together with a new family of engines and a new electronic interface. Fully developed by Volvo engineers, the company will no longer be dependent on any intellectual property rights from the former owner, Ford Motor Co. With the new factory in Chengdu in place, Volvo is aiming to manufacture several models in China. This is the first new car plant Volvo has built for 30 years and it has been completed in record time. “We have a clear ambition to continue to further shorten the time for development of new cars, but we will never cut corners in our process, because then quality might suffer. The customers’ perception must be that cars manufactured by Volvo Cars in China are as good as cars produced anywhere else,” says Lars Falk, vice president for product design at Volvo Car China. “The Chinese love European and American brands but they still want to be Chinese. The car manufacturer who fully understands that can be a winner,” he adds. Volvo’s design studio in Jiading, a district of Shanghai, comprises 11 employees, three of them Swedish and eight Chinese. They are in internal competition with Volvo’s two other design centres in Gothenburg and Los Angeles. With support from the owner, Zhejiang Geely Holding Group Company, Volvo aims

to boost sales in China to 200,000 by 2015. Worldwide, Volvo aims to sell 800,000 cars by 2020. Last year, it sold 428,000 cars globally. Falk and his colleagues have to tackle a critical question, which is how to adjust the product and the design to fit the Chinese automobile market, which is the largest in the world. “We often get questions from Chinese customers about whether we can add more equipment to the cars. We have a good product today, but we must be even better to compete with Mercedes, BMW, Audi and Lexus in this market,” says Falk. “We will definitely deliver more luxury in the cars without giving up our Scandinavian ideals. But we will not introduce golden or glitzy accessories. Rather, we are aiming to use crystals and stainless steel, materials that are in line with what is credible for a Swedish company to use,” he says. Falk has a background from both Saab and Volvo in Sweden and can see clearly the differences in how car consumers in China regard quality compared to Scandinavian buyers. “Knowledge about cars in Europe is very high. Consumers know, in general, what they will get for their money. They can also complain if a car doesn’t meet their expectations. China is very different. It is a young and immature market – before 1995 there were almost no private cars in China. So awareness about what is high quality is very low. Consumers inspect the car when they

In China, it is definitely possible to achieve high quality but the customer must also be prepared to pay for it.” Eva Iding, Gekko Quality Solutions

12 DRAGONNEWS • NO.01/2014

We will definitely deliver more luxury in the cars without giving up our Scandinavian ideals.” Lars Falk, Volvo Car China mechanics”, with plenty of buttons, knobs and levers.

The Chengdu plant has quickly climbed up the quality ladder.”

Volvo’s design style is, and will still be, more simplistic and sophisticated than the style of some of its competitors. Volvo’s customers normally appreciate, for example, the design of Apple’s computers and Bang Olufsen’s hi-fi products. They are often doctors, teachers, entrepreneurs or Chinese returnees that have become disappointed with the environmental destruction in China. They are also young: the average Volvo buyer in China is 35 years old, according to Lindwall, compared to 55 years old worldwide. “Our customers don’t buy Louis Vuitton bags for showing off, but they may buy Salavatore Ferragamo bags because of the outstanding leather quality. They also appreciate Volvo because of our extremely good interior air quality system, which always maintains cleaner air inside the car than outside,” says Falk. Exclusively for China, Volvo has extended

Ola Lindwall, Volvo Car China

are buying it and they pay for it in cash; they don’t trust the banks. There is no organisation for complaints,” says Falk. Ola Lindwall, vice president for quality and customer satisfaction at Volvo Car China, points out that “most Chinese haven’t been brought up in families that own a car, so what they know about cars is what they have learnt in theory.” Audi has been very successful in China thanks to an interior design that Falk describes as a “symphony of micro-

that has not been inspected and approved,” she adds. The best way to ensure quality throughout, according to Iding, is to be present in the factory and carry out inspections from the initial phase, through production and preshipping to container loading. “You need to go there often to create an open and long-term good relationship with the factory. Then, they will also dare to be open, even about their suppliers,” she says.

For Swedish quality fashion brand Greta, production in China has been a great advantage due to being close to suppliers and a factory in Beijing. Greta was created in Beijing with a collection consisting of classic-style dresses and blouses. The target group is careerminded women 28 and older, with all kinds of body types. The products are made from top quality silk, made in China. Co-founder and creative director Josefine Olsson, who has been living in Beijing for five years, established Greta Design together

the S80 and S60 models by 8-14 centimetres since it is common that the owner sits in the back seat in chauffeur-driven cars. “Extending them was very good for the design of the cars since they look more graceful. We were, however, a bit surprised when we found out that only up to 10 per cent of these cars were actually chauffeurdriven. Instead, they are often used to drive parents because it provides them with more comfort in the back seat,” says Falk. Quality ratings from the global market research company JD Power & Associates show that Volvo stands out good in the Chinese market. “In the quality ratings, we have shown comparable results with Audi, BMW and Mercedes. Toyota-owned Lexus is not as dominant in China as they have been in the US ratings for a long row of years. When it comes to sales and services, we are still lagging behind Audi and BMW but we are at the same level as Lexus, Mercedes and Land Rover,” says Lindwall. Volvo has started to produce cars in its newly built factory in Chengdu, the capital of Sichuan Province. “The quality requirements there are exactly the same as for our factories in Gothenburg and Ghent [in Belgium]. The Chengdu plant has quickly climbed up the quality ladder and there is more manual work there than in the other factories, which means it is a challenge to quickly train operators. Also, the cars are tested and checked more completely in Chengdu versus our other plants, such as longer test drives for each car,” says Lindwall. Volvo sold 62,000 cars in China in 2013, an increase from 43,000 in 2012.

250

company buys the best silk it can with her sister-in-law Hanna get from Guangzhou. In terms Olsson. The first collection of production, the requirements was introduced in 2010. are strict. The seams have to be “I have always had a dream straight and the buttons must be to start an own brand,” says The number of foreigners tightly fastened. Olsson, who travels between working for the Chinese The clothes are sold in Sweden and China on a car company Qoros Swedish department stores such regular basis. “To be in Beijing Automotive. as NK and Åhléns, the fashionmade things easier in the store chain Jackie and some beginning. We work directly smaller shops. Around half of the turnover is with a factory here, without any middlemen, generated through Greta’s online store. Olsson is so we can do regular quality controls.” also planning to market Greta clothes in China. Quality is a key word for Greta. The

DRAGONNEWS • NO.01/2014 13

The customers’ perception must be that cars manufactured by Volvo Cars in China are as good as cars produced anywhere else.” Lars Falk, Volvo Car China

At the same time, she is looking around for alternative locations for production. “Today, the costs are almost the same in China as in the Baltic States. We could use a factory there, while continuing to buy the materials from China,” says Olsson. “Making money seems to be such an important thing in China, where many seem to have an emphasis on quantity rather than quality,” she says. For the Swedish car brand Volvo, quality and safety have been cornerstones since its inauguration in 1927. Since 2010, Volvo has been owned by Chinese Geely, which has started to produce cars in China. It is now, perhaps more important than ever, for Volvo not to compromise when it comes to high quality. “The customers’ perception must be that cars manufactured by Volvo Cars in China are as good as cars produced anywhere else,” says Lars Falk, vice president for product design at Volvo Car China. “Our internal studies show that the cars we produce in Chengdu are of very

Making money seems to be the most important thing in China with an emphasis on quantity instead of quality.” Josefine Olsson, Greta Design

14 DRAGONNEWS • NO.01/2014

good quality,” he adds. His colleague Ola Lindwall, vice president for quality and customer satisfaction at Volvo Car China, confirms that Volvo stands out good in the Chinese market in the quality ratings from the global market research company JD Power & Associates. “We have shown comparable results with Audi, BMW and Mercedes,” he says (see separate article). As China’s once formidable cost advantage shrinks and the country aims to reduce its reliance on exports, one solution could be to produce more products that can collectively escalate the country up the value chain of manufacturing. “It is happening very slowly, but it is happening,” Michael Clendenin, managing director of RedTech Advisors, a Shanghaibased consumer technology research and consulting company, told TIME Magazine. “For every one Chinese company that is improving [product quality], there are probably 10 out there that are still cutting

corners and two [other] new companies are coming into the market by cutting more corners,” says Clendenin. However, the European Central Bank said in a working paper in 2011 that China is getting better when it comes to quality. “According to our findings China not only exports the same kind of products as developed economies, but also the quality of these products is similar to the technologically most advanced competitors. In addition, China has increased the quality of its export products and thus poses a potential threat to the market position of the US, Japan or the EU economies,” the bank says. This trend is also verified by Ann Duignan, an analyst at JP Morgan Equity Research, who has been visiting Chinese equipment makers for a decade. She said, in the Wall Street Journal last December, that quality varies hugely among them. At the best ones, “it’s incredible the speed at which they are coming up the quality curve,” she said. That spells tougher competition for a host of Western equipment makers. In a quality survey released by JD Power in October last year, four Chinese car brands managed to get a higher rating than the industry average. GAC Motor’s Trumpchi was even beating global brands such as GM’s Buick and Chevrolet, Ford, Nissan and Honda. Venucia, Roewe and Luxgen, also performed well. “Chinese domestic brands achieved tremendous improvements in vehicle quality in 2013,” Mei Songlin, JD Power’s China vice president, said in a statement. Lindwall of Volvo agrees that domestic car brands have become better, “but there is still a big gap to European and other Asian manufacturers”. He notes that when it comes to Japanese brands, every detail is perfect even in cheaper cars, while in China manufacturers seem to put parts together as quickly as possible.

“Even if everything goes fast in China, it will probably take at least a decade for Chinese automakers to close the quality gap,” says Lindwall. In the 1980s and 1990s, Japanese and South Korean enterprises started their export drive but stumbled many times on the road to building world-class brands. Today, however, nobody

can question the quality of their cars, consumer electronics and home appliances. Some Chinese companies will probably try to follow the same road, but with today’s rapid pace of globalisation, they may not have the time that the Japanese and Korean companies had to build their own world-class brands. First, they probably have to win back the confidence of their domestic consumers. b

Quality is an attitude For Iggesund, a market leader in high-end virgin fibre paperboard, quality has to be provided throughout the business process. For Iggesund Paperboard, quality is not only about the physical characteristics of the products themselves. Quality also means satisfying the customer’s requirements in every aspect of the business process. Quality is an attitude and should be provided from product development through manufacturing and distribution to marketing, sales and after-sales support. “Ever since we introduced our Invercote paperboard brand in 1963, all our customers associate us with high quality,” says Simopekka Pöyhönen, president of Iggesund Paperboard Asia in Hong Kong. Iggesund, which belongs to the Swedish pulp and paper Holmen Group, uses a 1.3 million-hectare forest, owned by Holmen, as raw material for the paperboard. “This forest is run by ourselves and 30 million new trees are planted every year to produce the raw material, solid bleached board,” says Pöyhönen. Even if China is a big market for Iggesund, the company has never thought of setting up production there. Instead, Iggesund works with a broad network of distributors. “Local competitors have a problem with getting raw material, since there is a lack of fibres, especially high-quality fibres, in China. They always buy where they can get it most cheaply, which means that there will always be different types of fibres, and different levels of quality in their products. We can never get the same type of quality using raw material from China as we can get from our own high-quality forest,” says Pöyhönen. Iggesund is a market leader for high-end virgin fibre paperboard for premium packaging. Its customer packaging is used by a variety of industries, such as tobacco, food, cosmetics, electronics and pharmaceuticals. Many are famous worldwide brands, such as Chanel and Dior. Since Iggesund is positioned in the high-end segment, its products are not the cheapest on the market. “It is easy to say that you are a quality producer but you have to be humble in the beginning and prove your strength. We have been in Asia since the 1980s and we have brand recognition. Our customers are also in the same segment. When we meet prospective clients that are only looking at the price, we normally back out of the deal rather quickly,” says Pöyhönen.

16 DRAGONNEWS • NO.01/2014

It is easy to say that you are a quality producer, but you have to be humble in the beginning and prove your strength.” Simopekka Pöyhönen, Iggesund Paperboard Asia

Quality made in China The new Chinese car brand Qoros has attracted 250 foreigners with long experience in the automotive industry, among them 33 Swedes, and its first model was awarded top rating for safety in a prestigious European test. Even though the company was founded as recently as in 2007 it already employs 2,000 people today. Half of them are working on four floors of the up-market HSBC Building in the Luijiazui financial district of Pudong, Shanghai. Of these 1,000 employees, 250 are expatriates with long experience in the automotive industry. They represent 27 nationalities, with backgrounds from 37 automotive brands. There are 33 Swedes among them. The company is Qoros Automotive, or Guanzhi in Chinese – meaning continuous improvement. It is a Chinese company, owned jointly by the domestic car company Chery Automobile and the Israel Corporation, the largest holding company in Israel and which is mainly responsible for the financial backing. It is producing its cars at a newly built factory in Changshu, 80 kilometres northwest of Shanghai. In the growing Chinese automobile market, Qoros has gained a position with a brand identity and product positioning that is clearly distinguishable from other domestic car manufacturers and international joint ventures. The Qoros 3 Sedan made its international debut at the Geneva and Shanghai motor shows in 2013 to great acclaim. In September, the car became the first developed in China to be awarded the maximum five-star rating in the Euro NCAP crash tests, achieving one of the highest scores ever in the programme’s 16-year history. Only the Volvo V40 has got a higher rating. Euro NCAP is an independent consortium with 11 members made up of government representatives, automobile clubs and consumer protection organisations.

18 DRAGONNEWS • NO.01/2014

“When I was approached by Qoros, I had never heard of the brand,” says Daniel Backman, director for product management and strategy, who was working for Volvo in China when his two-year contract expired and he decided to join Qoros instead of going back home. “The company’s strategy is to employ less people than other automakers, but these people should be the best. Most of us foreigners have 20-30 years of experience in established car companies,” says Backman. “The constellation of the owners was something that got me interested immediately,” says Roger Malkusson, executive director for vehicle integration, who has long experience at Saab Automobile and came to China in 2005 to work for General Motors (GM). He was among the first foreigners to be hired by Qoros in 2009. “The classic way of producing cars in China is that one Western and one local car company form a joint venture. But it often leads to conflicts. The Western company wants to get hold of the Chinese market and the Chinese company wants the foreign technology. At Qoros, we have a local carmaker and a foreign financier as owners and can fully focus on developing the products without arguing

about what processes should be used,” says Malkusson. Freddy Ploj, a manufacturing director, and Stefan Wimnell, a product development senior manager, had both been colleagues with Malkusson at Saab and GM. They did not hesitate to follow in his footsteps and join Qoros. “It is a chance of a lifetime to be part of a team which builds something totally new and works in a different way compared to a multinational company,” says Ploj. “My first thought when Roger called was that this wasn’t possible. But he convinced me and I resigned from GM and moved from South Korea to Shanghai,” says Wimnell.

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Even if the company is fully focused on producing quality – its slogan is “Relentless pursuit of quality” – it cannot do so totally on its own; it also has to rely on suppliers. That was a problem in the beginning, admits Malkusson. “Some suppliers were a bit sceptical since Qoros was a new brand,” he says. “But since we are not a joint venture between two car brands we don’t need to buy 40 per cent of the parts from local suppliers – we could simply go for the best. And when we contracted some of them, others followed suit and now we share suppliers with companies such as BMW, Audi and Volvo.”

The company’s strategy is to employ less people than other automakers, but these people should be the best.” Daniel Backman, Qoros

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The factory in Changshu started production in 2013 and the first car was sold on New Year’s Eve. At the moment, 74 cars per day are manufactured but the factory’s capacity is more than 10 times bigger, or 225,000 cars per year. The factory is also prepared for expanding the capacity to 450,000 cars annually. “There are European standards throughout the factory and much of the equipment comes from Europe,” says Ploj. “We have also created an Academy for developing and training the staff.” Qoros is preparing for a nationwide distribution network and has set up 21 authorised exclusive dealerships. The target is

The classic way of producing cars in China [in joint ventures] often leads to conflicts.” Roger Malkusson, Qoros

20 DRAGONNEWS • NO.01/2014

to have at least 100 dealers by year-end. The retail price for a car starts at RMB119,900, which is not the cheapest on the market but still much less expensive than many foreign brands, especially considering the high level of equipment. “Our customers are modern metropolitans between 25 and 35 years old that live in big cities in China. For around 70 per cent of them, so far, it is their first car,” says Backman. The car is equipped with a permanent 3G Internet connection, with an eight-inch screen for navigation and driving control, a system that can also communicate with smartphones and PCs. So far, one model has been put in production but there are plans to introduce two other models this year. Qoros chose to position itself in the highly competitive compact-car segment with models such as Volkswagen Golf, Ford Focus and Toyota Corolla as key competitors. “This segment has the largest customer base in China. Even if it has lower margins than the luxury car segment, it is the best to be in to get acceptance from the target group to buy a car that is manufactured in China. An owner of, for example, a Lexus would never buy a car made in China,” says Malkusson. Qoros has also started to export cars. A small market, Slovakia, was chosen as a first test. Interest has been huge – the company has already been approached by more than 500 dealers that want to sell their Chinese cars in Europe ...

A banker with his heart in Hong Kong SEB Asia’s chairman Hanse Ringström believes China will speed up deregulation of its banking sector and step-by-step move towards full convertibility of the currency. ‘Nobody will benefit if China stumbles when deregulating,’ he says. Text: Jan Hökerberg, Bamboo, jan.hokerberg@bambooinasia.com

anse Ringström didn’t hesitate when he was once again offered to relocate to Hong Kong from Sweden with the responsibility of coordinating the activities of SEB in Asia, where the bank also has offices in Singapore, Beijing, Shanghai and New Delhi. The bank’s operations in China began in 1983 with a representative office in Beijing followed by a full branch in Shanghai in 2005. According to official statistics, the Shanghai branch is the seventh largest foreign bank branch on the mainland. “SEB’s mantra is to try to follow our home-market clients out in the world, helping them facilitate their strategies and ambitions. Our home markets, the Nordic countries and Germany, have a large and growing business in Asia, and because Hong Kong is an international financial centre it is one of the places in the region that resembles our home markets. Here, we have the necessary infrastructure with, for example, legal and auditing firms, a pool of competence together with international legal practices,” says Ringström. Hong Kong is also logistically an ideal location because half of the world’s population can be reached from the city within five hours of flying time. In Asia, SEB has different centres of excellence and competences. The Shanghai and Beijing offices are focused on corporate clients. “It’s a complicated regulatory environment and over the years we’ve built a knowledge base allowing us to advice clients on how to best find their ways around issues associated with establishing themselves or expanding in China. After having received all necessary product licenses, as a branch we are 22 DRAGONNEWS • NO.01/2014

He got married in 1974 with Britt, whom well put to serve them. We have clients from he met in Lund. When she finished her uniall our home markets and Germany is growversity studies in psychology a year later, the ing rapidly in importance,” says Ringström. couple moved to her hometown, Gothenburg, Hong Kong is a centre for financial instiwhere Industrikredit also had an office. The tutions and related products such as equities, couple’s three children Peter, Louise and futures and fixed income. With these products Henrik were all born in Gothenburg between they service all of our operations in Asia. 1978 and 1987. Hong Kong also complements the corporate In 1979, Ringström moved into banking, strategy in the region in terms of traditional first at Handelsbanken and later with corporate banking products – for example forSwedbank, before being recruited by SEB eign exchange, trade finance, lending and cash International in 1986 as a client executive for management. The focus is, however, financial some larger accounts of the institutions, which were the bank. The family moved main driver of the reopening back to Stockholm. of Hong Kong branch three “At the end of 1990, years ago. the bank asked me if I was Singapore, SEB’s interested taking over from first branch in Asia, was Claes von Post as the head established in 1978 and is of the Hong Kong branch. the bank’s operational/IT My wife was immediately centre as well as the regional The time period before the positive that it would be treasury centre, focusing on Chinese currency will be exciting and challenging,” corporate clients as well as convertible, according to says Ringström. on financial institutions and Hanse Ringström’s predictions. specialises in shipping, trade and export financing. In The family moved to Hong Kong in 1991 and stayed in the then India, SEB has a representative office in New British colony until the summer of 1994. Delhi, with the responsibility to cover home“At the time, Hong Kong was undisputmarket clients. All in all, the bank has around edly the gateway to China and a natural 200 staff in Asia. centre for companies that had ambitions to do business on the mainland. There was a big Born in Stockholm in 1948, Ringström expatriate community in the city and we had grew up in the small picturesque coastal town a very exciting time,” says Ringström of Vaxholm, just north of Sweden’s capital. AfThe branch had around 65-70 employees at ter graduating from Lund University, he found the time and undertook a broad variety of banka job as a credit analyst at Industrikredit in ing services, primarily aimed at the corporate Stockholm, a company owned jointly by the segment in Northeast Asia including China. Swedish government and Swedish banks, with “After the financial crises in Sweden, the the role of facilitating the long-term financing bank started to embark on the home-market needs of small and medium-sized enterprises.

3-5 years

It’s important for China to carry out this project [the Shanghai Free Trade Zone] so that they can learn to understand the effects of deregulation.” strategy we have today, which means that all clients have to have a link to the Nordic countries or Germany. Today this strategy is much more refined and has served the bank very well through subsequent international crises and downturns,” says Ringström. He extended the contract for two more years but was called home to the head office, which wanted Ringström to work as a senior client executive in a new organisation in which he had overall responsibility for some of the bank’s large corporate clients. “Working with client responsibility has always been my specialty and this new job suited me well. One problem, when you work abroad, is that the job you want at home may not be there if you don’t return at the right time. It’s a fine balance,” says Ringström. In 1999, he left SEB for a job as chief executive officer of SINSER Holding, a captive and risk-management company within the Skandia Group. Skandia did gradually develop into a savings and asset-management company at the time, and Ringström’s mission became to find a better home for the SINSER group. In the summer of 2001 SINSER was sold to the UK-based Aon Corporation. Ringström was asked to return to SEB

when Annika Falkengren, who was then head of SEB’s merchant banking division (and today the bank’s president and CEO), recruited him to be the global head of CRM (clientrelationship management). That made him head of an organisation of around 400 people, with the overall responsibility for large and medium-sized clients in five countries. Ringström says his heart has always been partly in Hong Kong. In 2011, when SEB reopened its Hong Kong branch, Ringström was asked to move there again, this time as chairman of SEB Asia Advisory Board. “By merging the boards of our different operations, we secured a seamless cooperation between the offices in Asia and avoided unnecessary internal competition as well as doublingup of functions and competencies, which we can often use to our advantage,” he says. He is following the development in China with great interest – in particular the launch of the Free Trade Zone in Shanghai. “It’s important for China to carry out this project so that they can learn more about the effects of deregulation. If the ambition of the State Council to turn Shanghai into a fully fledged international financial centre by 2020 is going to succeed, one of the prerequisites is

that the Chinese currency must be convertible,” says Ringström. He strongly believes that Hong Kong can play an important role as a future international financial centre, as well as a managerial centre: “Hong Kong should focus on continuing to develop as a ‘cutting-edge‘ financial centre, and be the obvious international complement to London and New York in this time zone,” he says. “You need the predictability of rule of law and you need the infrastructure in the form of institutions, a pool of competence, traditions, culture and much more. Success is certainly not simply a question of making a political decision,” he says. He believes that China’s leaders will allow continued deregulation of the banking system one step at a time and that the Chinese yuan will start to be convertible within a period of three to five years. “The financial system is a beast that is hard to control, as the world was painfully reminded of in 2008-2009. China’s leaders are sensible and competent, and China’s role in the world economy is very important today. Nobody will benefit if China stumbles when deregulating. One step at a time would be my advice,” says Ringström. b DRAGONNEWS • NO.01/2014 23

Promoting Sweden in social media As information officer at the Embassy of Sweden, Björn Djurberg tries to engage with issues that the embassy considers being of high importance in China, such as freedom on the Internet and environmental issues. Text: Jonas Söderström, soder.jonas@gmail.com

he Swedish embassy’s information officer Björn Djurberg was born and raised in Östersund, a city in Jämtland county in the middle of Sweden. He studied journalism for two years at a public university and did some temporary jobs at various media institutions, such as Sveriges Radio, the national public broadcaster, at its local stations in Växjö, Jämtland and Blekinge, before starting to work for TV4 in Malmö. At the same time, he was studying for a Bachelor’s degree in Chinese at Lund University. He worked as a freelance journalist and stringer for TV4 in China from 2012, before recently joining the embassy. He has also studied Chinese at Beijing Foreign Studies University.

When you’re looking for a job or an education, go for what you think is fun and interesting. That’s what I did.”

Speaking the Chinese language is the most rapid way to immerse yourself in the Chinese culture.”

What is going on at the Swedish embassy right now? “We have a relatively new policy on so-called public diplomacy, where we – among other things – try to reach out on all the social media, and not only working on more traditional bilateral diplomacy platforms. These media include Sina Weibo, Weixin and Instagram, as well as YouTube and Youku, along with newsletters, websites and events.” What is the target group in these social-media channels? “Every social-media platform has its own purpose. Weibo for instance, is mostly used by the Chinese public, but we are also trying to reach out to people who have more influence on the Chinese public, to work on certain issues we find important. “Of course, we are also working for promoting Swedish interests in China and enhancing the image of Sweden in the eyes of the Chinese public.”

Back in 1996, when mobile phones were the size of bricks; before tablets, before 3G, before Google even, Microsoft co-founder Bill Gates wrote an article in which he foresaw the importance of content on the Internet.

What are the challenges of your new job? “The starting point is different. When you work as a journalist, you work for and focus on the reader, so you need to be quite objective. But working at the embassy – for the interest of the Swedish people, is more subjective. This means that you have to think differently, look at things from another angle. Also, working as a journalist can be quite informal, unlike working at the embassy. Also, the Swedish embassy in Beijing is the largest bilateral foreign department Sweden has, so there is a lot of things to know and learn, and a lot of information to handle.”

Do you have any tips or suggestions for Young Professionals in China? “When you’re looking for a job or an education, go for what you think is fun and interesting. That’s what I did. For example, a few years back a friend and I started a China blog focused on news (www.vflnyheter.se), which kept on growing and later evolved into a How do you think these channels have platform from which we were also able to produce worked so far? The number of followers the Swedish “We have been using Weibo for over a year now newsletters for companies and organisations. Why? embassy has on Sina Weibo. and we can see that we are able to reach out to Because we thought it was fun building our own the public in a whole new way compared to more brand in an area we were interested in. You have a traditional methods. On Weibo, we have over 37,000 followers. Weibo greater chance of success if you are genuinely interested in what you are also has a platform for live chat that has been quite useful. doing, and don’t only consider the economic aspect.” “For example, during an event promoting Swedish environmental technology that we are arranging together with Business Sweden How much have your skills in the Chinese language in March, we will use new analysis of the air pollution in Beijing as helped you? basis for live chat on Weibo. Netizens will be able to live chat with “It’s been invaluable. If you know good Chinese, it will get easier to get into our environmental specialist here from the Centre for Environmental contact with people – people outside the major cities in particular. KnowTechnology (CENTEC). ing the language is the best way to get into the Chinese society. I’d like to “One can ask why Sweden should try to do things like this, but we add though, that you need some kind of special skill or qualifications as need to place an emphasis on issues we consider of high importance, well as knowledge of the language. It’s also preferable that you know what such as freedom on the Internet and environmental issues – both of you would like to use the language for, what you are aiming for.” b which are big challenges for China, and also contain great potential for improvements – which of course is important in terms of Swedish politics. There is also an economic aspect. Sweden has a number Björn Djurberg in brief of companies working on environmental issues and environmental enhancement, and we want to promote them.” Age: 29.

37,000

How did you get interested in Chinese in the first place? “Actually I didn’t know anything about China before I started to study the language, but I wanted to do something new, and take up a new challenge. I got accepted into a Chinese course I’d applied for, started to study, and realised it was fun. Speaking the Chinese language is the most rapid way to immerse yourself in the Chinese culture, and I’m determined to continue to study a little bit every day.”

26 DRAGONNEWS • NO.01/2014

Job: Information officer at the Swedish embassy. Lives: Together with his girlfriend in Beijing’s Chaoyang District. Time in China: Three years. Best thing about Beijing: “That everything is so big, and there is a huge selection of interesting people, as well as cultural and political events.” Worst thing about Beijing: “That everything is so big, which makes it hard to get around, with a complicated traffic situation and bad air.”

“Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting … Those who succeed will propel the Internet forward as a marketplace of ideas, experiences, and products – a marketplace of content,” he wrote. Bill Gates was right. Today, 17 years later, content marketing has become the art of communicating with customers and prospects without the hard sell. If you, as a company, can deliver consistent, ongoing, valuable content to buyers, ultimately they will reward you with their business and loyalty.

Bamboo has been creating content in Hong Kong and overseas from 1996 and in China from 2002 as a one-stop shop for its customers. Here is what we can do: Customer magazines and newsletters, internal magazines and newsletters, apps for iPad and Android tablets, e-newsletters and websites, corporate video, marketing materials for trade fairs, article assignments and photography, interactive sales presentations, reader surveys, advertisements, etc. We can do it in Simplified or Traditional Chinese and other Asian languages, as well as in English. Feel free to contact us to know more or to set up a meeting. Jan Hökerberg, managing director jan.hokerberg@bambooinasia.com Johan Olausson, sales and marketing manager johan.olausson@bambooinasia.com

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The football manager

A manager with a democratic heart Photo: Jan Hökerberg

Football manager Sven-Göran Eriksson has worked in nine different countries and is now enjoying life in Guangzhou, where his ambition is to take his team to the Asian Champions League.

Text: Jan Hökerberg, Bamboo, jan.hokerberg@bambooinasia.com

I have never seen any paparazzi in China, I don’t know if they exist.”

“There is no grassroots football in China, the country needs a ‘Yao Ming’ in football,” says Sven-Göran Eriksson.

28 DRAGONNEWS • NO.01/2014

is an early March Saturday in Eriksson enjoys living as David Beckham, Paul Shenzhen and Sven-Göran Eriksand working in China: “The Scholes, Nicky Butt, Gary son has arrived the day before country is developing so fast, and Phil Neville, that had from Guangzhou to check in at and you see cranes everyonly had one manager in the hotel with his team and inspect the arena where. The negative thing their football life – Sir Alex where they are going to meet the Swedish footis the air pollution. We just Ferguson, who was not ball club AIK in a friendly encounter. came back from a training known for being particularly It doesn’t happen that often nowadays camp in Turkey where we democratic. These players rethat Eriksson, known as “Svennis” in his nahad clear-blue skies every day ally appreciated it when they tive country, faces Swedish opponents. He left – it’s not so common here.” realised that they could actuSweden in 1982 after winning the UEFA Cup He has been invited to a ally engage in dialogue with with IFK Göteborg in Hamburg. Since then, number of banquets and has the manager,” says Eriksson. he has worked as a football manager in eight learnt to appreciate Chinese China, he thinks, is like reSven-Göran Eriksson recently countries, coaching famous teams such as food, which he thinks “is turning to the 1980s. The Chireleased his autobiography, called Sven: My Story in English. Benfica, Roma, Fiorentina, Sampdoria, Lazio very different from what you nese players are still used to do and Manchester City, as well as the national get at Chinese restaurants what the boss says, “but they teams of England, Mexico and Ivory Coast. abroad”. He has also become adjusted to the are learning fast and very nice to work with”. Since June 2013, he has been the way the Chinese drink wine and the ganbei manager of Guangzhou R&F, a team in the drinking culture. Over the years, Eriksson has met many Chinese Super League owned by a local conbusinessmen among club owners, directors struction company. He has a contract that and sponsors. He believes that there are clear Being one of the world’s most wellends in December this year. known football managers, Eriksson is similarities between running a football team “Last season, we managed to climb from a accustomed to the fact of paparazzi, illegal and running a company. 13th place in the league when I arrived to sixth phone hacking and other infringements of “The overall goal is to produce something his personal life. In that sense, life in China is good. That means it’s important to exploit place. The coming season, which starts in very different. each individual’s capacity as much as possible. March, we aim to be among the “Yes, I can be much more To carry that out, you need to create a good top three to qualify for the AFC anonymous here. I’ve never seen atmosphere in the office and in the dressing [Asian] Champions League,” any paparazzi in China, I don’t room. If you have a good team spirit, you can says Eriksson who knows that know if they exist. My feeling also handle setbacks. If the team spirit is bad, if he doesn’t fulfil the goal the The number of major is that private life is much more then setbacks can lead to chaos,” says Eriksson. contract may not be extended. trophies Sven-Göran respected here,” says Eriksson. After talking to Dragon News, he returned Eriksson has won with a Football in China has been to prepare for the friendly against Allsvenskan Winning trophies are as variety of football clubs. plagued by corruption scandals, runners-up AIK, a game Guangzhou R&F important in Asia as in other with leaders, referees and playwon 1-0 after a second-half free-kick from parts of the world, not only for ers involved in match-fixing and illegal betsubstitute Lu Lin – a rare win for a Chinese managers and players, but also for the investors ting, a phenomenon Eriksson has witnessed in side against visiting European opposition. that are pumping money into Chinese football. other countries, especially Italy. In other words, Eriksson seems to have Arch rivals Guangzhou Evergrande, coached “Another problem is that there is no grasscreated a good team spirit in his Chinese by the Italian World Cup-winning manager roots football in China,” he says. “In Europe, club’s dressing room ahead of the start of the Marcello Lippi, won both the Super League football is played everywhere – in parks and Chinese Super League. b and the AFC Champions League last season. public sports grounds. Youths grow up with “They have their roots in Guangzhou football, they have it in their blood. In China, while our club has been acquired and moved Sven-Göran Eriksson on … you don’t see that. If they play something, it is there. When they play Champions League normally badminton, table tennis or basketball. they can attract an audience of 50,000, while … what has been his best time as a foot“With that background, it’s not surprising our average is around 15,000,” says Eriksson ball manager: “I’ve enjoyed myself everythat China is around 90th in the world rankwho has a good relationship with Lippi, whom where, but to take seven trophies in 3-1/2 he knows well from his Italian years. They are ings. China needs a ‘Yao Ming’ in football, years at Lazio was something special.” also the same age – both were born in 1948. but unfortunately there are few Chinese play… what team will win the World Cup ers that have succeeded abroad,” says Eriksson. later this year: “Probably Brazil since

If you have a good team spirit, you can also handle setbacks.”

He considers himself a typical Swedish leader with an open and democratic management style. “When I moved from Sweden to Portugal to coach Benfica I tried to involve the players in discussions, but they were not used to that. The same thing happened in Italy. They were more used to having the boss decide everything,” he says. “When I took over England’s national team, there were a group of key players, such

it means a lot to play at home. Spain is still a good team and Argentina can also go far since the cup is being played in South America.” … adding Mandarin to the other languages he speaks (Swedish, English, Italian, Portuguese, Spanish): “I have taken some lessons and I will step it up this year. It is, however, very difficult, when a word can have up to five different meanings.”

DRAGONNEWS • NO.01/2014 29

Hong Kong Anthony Philips and Ulrica Andersson.

Karin Gibson congratulated by Jimmy Bjennmyr.

Ulf Ohrling and Eva Karlberg.

Helen Jonasson, winner of a junk boat trip sponsored by Santa Fe.

Anna Kjelsdotter.

Best dressed Walter Jennings and Karin Gibson (middle) together with the jury, Johanna Söderblom and Jimmy Bjennmyr, and dancers from Lisa B Academy of Jazz.

“Pearl of the Orient” Gala Dinner n On Saturday 1 March 2014 the Swedish Chamber of Commerce in Hong Kong hosted an exciting evening at The China Club, with the theme “Pearl of the Orient”. Guests were elegantly attired in 1920s-style, according to the theme of the evening, making it challenging for the jury to choose the Best-Dressed Man and Best-Dressed Woman. The winners were finally announced to be Walter Jennings and Karin Gibson. Anthony Phillips, MC of the party, professionally guided us through the evening’s many happenings. They included dancers from Lisa B Academy of Jazz, who put on an engaging series of dances from the period, such as the Charleston and jive. The dance floor filled up in no time by everyone who was in the mood to party. Thank you to our generous sponsors:

Protecting your brand in China n On Tuesday 21 January 2014 the Swedish chamber hosted a breakfast seminar on “Brand Protection Issues for Hong Kong and China”, which was presented by Ai-Leen Lim and Hank Leung from Bird & Bird’s China Intellectual Property Practice. The seminar was very topical, providing members with helpful tips on trademark-filing strategies and some relevant and interesting case studies on trademark issues foreign companies face in China. There was much interactive discussion during the seminar, as attendees had many questions based on their own experience in terms of protecting their brands in China’s very complex but rewarding marketplace. The attendees were particularly interested in the problem of Chinese trademark squatters and what can be done to prevent their trademarks from being stolen, as well as the unique issues of the Chinese system, such as Chinese-character trademarks and the China Trademark Office’s goods and services sub-classification system, which is not found in other countries. Another interesting discussion point that drew quite a fair amount of questions and comments was the upcoming amendments to the Trademark Law in China, which will come into force on 1 May 2014 – for example, the availability of multi-class filings, new opposition procedures, as well as the new bad-faith provisions. The seminar took place at the SEB’s office in Jardine House and was attended by SwedCham members from CTEK, Today Group Asia, Stockholm Ltd, Primasia and Pripac.

Ai-Leen Lim and Hank Leung led a discussion on brand protection.

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Nordic touch with a Chinese edge what’s new?

joanna liu joins the firm’s china team in shanghai Joanna Liu, a legal consultant specialising in M&A and Employment related issues, has joined the firm from DLA Piper. She is a graduate of the University of Durham, UK and passed the PRC Bar Exam in 2010. nils eliasson appointed to hkiac council The Hong Kong International Arbitration Centre (HKIAC) has recently announced the appointment of Mannheimer Swartling partner Nils Eliasson to its Council membership. Nils heads Mannheimer Swartling’s Dispute Resolution practice in Asia. The HKIAC Council is the overall gover ning body of the HKIAC.

what’s up?

stockholm business region and chinese embassy in sweden hold round table discussion: “how do chinese companies succeed in sweden?” The discussion, initiated by the Stockholm Business Region and hosted jointly with the Commercial Counselor’s office of the Chinese Embassy in Sweden, was attended by some 70 people from various professions and nationalities represent ing both Swedish and Chinese business interests, including Bank of China, Huawei and Minmetal North Europe, and led by Thomas Lagerqvist, Chairman of the SwedenChina Trade Council and Senior Counsel of Mannheimer Swartling. A consensus was formed in the discussion that although the initial perception may be that there are significant differences, they are in fact manageable. Building an under standing about what the differences are and creating trust over time based on such an understanding is what leads to a formula for success: where businesses can mix the strengths of Chinese companies with those of the Swedish innovative ecosystem and the Swedish tradition of teamwork and “open source thinking”.

awards

mannheimer swartling named to gar30 ranking of world’s leading arbitration practices; seventh year in a row For the seventh year running, Mannheimer Swartling has been included in the the Global Arbitration Review’s elite GAR30 ranking of the world’s 30 most active arbitration law firms. Mannheimer Swartling is the only Nordic firm to receive this recognition in the 2014 edition. chambers asia pacific guide 2014 – recommended in dispute resolution and corporate/m&a Once again Mannheimer Swartling is recommended in the fields of Dispute Resolution and Corporate/M&A in the Chambers Asia Pacific guide. Furthermore, Nils Eliasson and Ulf Ohrling were given individual recognition as notable practitioners. “The firm is renowned as one of the giants of the Swedish disputes market and is seen as a top choice for Scandinavian clients operating in China. It also represents an impressive number of PRC entities.” “Counsel of choice for Nordic clients, offering corporate advice from bases in Shanghai and Hong Kong. ”

we wish all our friends a prosperous and happy year of the horse!

Beijing Major changes and developments in China n At the end of January, the Swedish chambers in Beijing, Shanghai and Hong Kong hosted one of Scandinavia’s top China financial experts, Frédéric Cho of Handelsbanken. This morning presentation, held in three cities, covered the numerous challenges faced by the new Chinese leadership and tried to dissect the policy documents published after the conclusion of the Third Plenary Session at the end of 2013. Certain conclusions and predictions were put forth, including a discussion on the paradox of Xi Jinping making China more authoritarian in the short-term in order to consolidate enough power to implement radical reforms that can make the country less authoritarian and more market-oriented in the mid-term. Cho’s colourful portrayal of the Chinese banking sector suggests that a possible domestic banking shakeout will occur as the government pivots away from overly

favourable conditions for domestic players, and as innovative online payment solutions in the Chinese market become viable alternatives to more traditional banking services. Overall, Cho carefully suggested a hopeful view of slow and incremental change that will lead to a more fair business environment for foreign companies in China.

Amanda Eriksson (Tiandi Rongtong) talks with the Swedish ambassador Lars Peter Fredén.

Mingling at the embassy

From left, Joakim Hedhill, Mikael Westerback, Frédéric Cho and Jason Wang, all from Handelsbanken.

n On the evening of 21 January, a delegation of staff from every section at the Swedish embassy mingled with staff from Business Sweden and the Swedish Chamber of Commerce in China. Representatives of the chamber’s corporate members also joined and listened to a presentation by the ambassador Lars Peter Fredén. His remarks included an enlightening description of the embassy’s structure and plans for the future, meanwhile introducing the head of each section. Lars-Åke Severin, chairman of the Swedish chamber’s Beijing Chapter, then introduced the Swedish chamber and gave a sneak preview of how the chamber will evolve in the near future. After these presentations, everybody enjoyed an informal dinner of excellent pan-European cuisine at the ambassador’s residence.

Thank you, sponsors

AGM and Spring Party coming up n Reserve the date 25 April in your calendar. That is when the Swedish Chamber of Commerce in China will hold its Annual General Meeting (AGM) at the Radisson Blu Hotel in Beijing. A Spring Party will follow. All chamber representatives from the member companies are invited to take part and use their vote to decide – among other things – on the composition of the board of directors in 2014-2015. The AGM starts at 4:30pm and the Spring Party at 7pm. After dinner, the party will continue in the Lounge

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Bar, which will feature a chocolate fountain, more drinks and mingling. The evening will be awash with great food and drinks, the Swedish chamber award ceremony, entertainment by Jan Wolfhagen, who will perform impersonations of some of the world´s most famous personalities, lovely tunes by our good friends by now, the Oförskräckt Group – and some surprises. Don´t miss out on this exciting evening. “Mr Bean”, “Bill Clinton” and the “Swedish King Carl XVI Gustaf” are just some of the famous names that will be in attendance.

The Swedish chamber would like to extend a big thank you to all our sponsors who made last year’s Christmas parties in Beijing and Shanghai such big successes. Your generous support is much appreciated.

Experience leads to excellence Vinge opened its office in Hong Kong as early as 1985. In 1999, Vinge became the first Swedish and Scandinavian law firm to obtain a licence to open an office in China, located in Shanghai. Vinge has led the way and assisted clients in Sweden-China related trade and investment matters for more than 20 years. Practice makes perfect.

Swedish Chamber of Commerce in China

STOCKHOLM

GOTHENBURG

MALMO

HELSINGBORG

BRUSSELS

HONG KONG

SHANGHAI

Shanghai What IKEA has learnt about market adaptation n Camilla Hammar, marketing director at IKEA Retail China, gave an interesting presentation to a crowd of 40 people from 30 different companies on 28 January in Shanghai. She revealed how IKEA communicates with Chinese consumers, what is consistent globally and what is adapted to the Chinese market. IKEA has discovered that in China you need

to show how the products are used in order for sales to take off. For instance, balconies are used completely differently in Europe than they are in China, where they are used for laundry and storage. It was a revelation that changed how IKEA markets balcony equipment completely. Hammar gave many more examples to an inquisitive audience.

Emma Gunterberg Sachs (Swedish Chamber of Commerce) and Camilla Hammar (IKEA).

Emily Roblin inspired the female audience to get more confidence.

Niklas Olsson of Nike talked about retaining the best talents.

Expertise Ways to leverage a global company culture n Niklas Olsson, director of organisation and people development at Nike in Greater China, held an inspirational seminar on 13 February at the Le Royal Méridien Hotel in Shanghai. He shared how Nike creates a team with excellent players, teamwork and with a clear strategy on how to play to win. He also revealed how Nike attracts the best and most passionate talent – a system he called the Talent Play – and how Nike implements its strong company culture in China. Olsson concluded the presentation with examples of how Nike continues to strengthen its workforce and keep its talent practice on the front line. He kept the audience of 27 enthusiastic participants engaged in discussion well into the evening, sharing experiences and thoughts over wine and canapés.

Dates not to be missed

Executive presence for female managers n Emily Roblin from LEAP facilitated a full-day workshop on Executive Presence for women executives in Shanghai on 25 February. The group of 38 women from 30 different companies learned how to develop the “it” factor – the ability of some people to exude confidence, to have influence, and to effectively get buy-in to ideas through numerous exercises, group discussions and lectures.

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Please save the dates for the following upcoming activities in Shanghai. These dates might change, so always check our website for the latest information. 6 June: National Day festivities 20 June: Midsummer Party 11 September: Newcomer’s Gathering 20 September: Crayfish Party 5 December: Christmas Party

We use our superior knowledge, experience and expertise to ensure we always deliver the best, customized solution for each customer and for goods that need to be in time, every time.

www.apclogistics.com

Taipei A focus on Sweden in Taipei n On 1 September, Secretary General Annette Magnusson from the Arbitration Institute of the Stockholm Chamber of Commerce will hold a seminar on how you, as a company, can settle a dispute under the arbitration law. Many companies, if not all, have a paragraph in their contract stating whether an arbitrator should settle a dispute. The question is why this would be a better solution for companies than turning to the courts. The Swedish Chamber of Commerce Taipei, in collaboration with Business Sweden in Taipei, is arranging a promotional event for Swedish business on Wednesday 12 November, 2014; a “Sweden Day”. The event will coincide with the visit by a Swedish state secretary who will be coming to Taipei with a business delegation for the 30th Joint Business Council meeting (JBC). We invite our Swedish company members to be part of the event. As a “main host” you will have the privilege of having a booth at the Huashan Creative Park and will be able to invite 40 guests to the event. The chamber and Business Sweden will invite officials and ta delegation from Sweden, meaning we will have about 500 people attending. If you are interested in participating in our events, please send an email to: louise@swedchamtw.org For more information regarding our activities, please see: www.swedchamtw.org From left, Louise Byström (Swedish Chamber of Commerce Taipei), Göran Marby (The Swedish Post and Telecom Authority) and Freddie Höglund (European Chamber of Commerce Taiwan).

Sweden committed to ensure broadband for everybody n On 21 February, the Swedish Chamber of Commerce Taipei, together with the European Chamber of Commerce Taiwan, hosted a special breakfast on the topic “Telecom Regulatory Challenges for Tomorrow”. At the event, the special guest speaker Göran Marby, Director-General of The Swedish Post and Telecom Authority (PTS) talked about the opportunities and challenges related to the development of telecommunications. Marby described the job of the Swedish post and telecom regulator as giving users a choice. Explaining his point, he noted that it is easy for monopolies to develop in any given market and it is the regulator’s main task to ensure that monopolies do not form and consumers always have enough choices. He joked that no matter what the regulator does, it is impossible to please everyone. If regulations are too strict, market participants will complain. If there is not enough competition and certain companies are making too much money, consumers will complain. Sweden has one of the world’s most advanced telecommunications regulatory systems and technology. It is also a good example for the world, for a number of reasons. The country is very sparsely populated in certain areas, but the authorities have made a commitment to ensure that everyone everywhere has access to broadband internet. According to Marby, the country is very close to fulfilling its commitment with fewer than 300 households now lacking access. Moreover, over 99 per cent of people have access to Long Term Evolution (LTE or 4G coverage). 36 DRAGONNEWS • NO.01/2014

JOHNNY’S PHOTO & VIDEO SUPPLY LTD Photographic Equipment Equipment •• Photographic •• Video/Audio Video/Audio Hi-Fi Hi-Fi Equipment Equipment Home Appliances Appliances •• Home Colour Film Film Processing/Enlargement Processing/Enlargement •• Colour •• Audio/Video Audio/Video Dubbing Dubbing Services Services Communication Equipment Equipment •• Communication Electronic Equipment Equipment •• Electronic •• Repairing Repairing Services Services Mail Order Order Acceptable Acceptable •• Mail Shop No.65, 1/F, Admiralty Centre, 18 Harcourt Road, Hong Kong Shop No.65, 1/F, Admiralty Centre, 18 Harcourt Road, Hong Kong Tel: 852-2877-2227 Fax: 852-2877-2120 Tel: 852-2877-2227 Fax: 852-2877-2120 Mobile: 9051-9499 E-mail: johnnysphoto@live.hk Mobile: 9051-9499 E-mail: johnnysphoto@live.hk Opening Hour: Mon – Sat 9:00am – 7:00pm Opening Hour: Mon – Sat 9:00am – 7:00pm Sunday 2:00pm – 6:00pm Sunday 2:00pm – 6:00pm

n SwedCham Hong Kong is pleased to present its views to the Legislative Council in relation to a series of infrastructure projects proposed by the government – namely, the extensions of three existing landfills, and the so called Integrated Waste Management Facilities Phase 1. In principle we support the government’s vision of a 40 per cent reduction of municipal solid waste by 2022. We also support the target outcome of 55 per cent of waste being recycled and 23 per cent incinerated in 2022, leaving only 22 per cent for landfills (compared to the 52 per cent of waste that goes to landfills today).

SwedCham believes that the Swedish government and Swedish waste management operators and technology providers have much to share with those responsible for waste management in Hong Kong. Sweden’s journey to almost zero landfill, a reduction in greenhouse gas emissions and a decrease in the need to purchase fuel to generate electricity has taken nearly 30 years, but we would be delighted to share the lessons we have learned with the legislators, officials and people of Hong Kong. To read the full submission from SwedCham HK, please go to www.swedcham.com.hk and click the Spotlight on the “board” icon to the right of the logo.

Garbage being hauled on a boat in Victoria Harbour. Hong Kong’s dense population in Hong Kong means its existing landfills are expected to be full by 2015.

Achieving greater value for members n The Swedish Chamber of Commerce in China has increased the number of its members to around 300 since it Katarina Nilsson has initiated was established 16 years a development project at the ago. That makes it one of China chamber. the largest national chambers of commerce in China, as well as one of the largest Swedish chambers of commerce abroad. “This flattering position also means increasing demand to deliver high-quality services to members. For a chamber of commerce, quality is relative and can be measured in different ways. Maximizing the number of members is one way, but it can also be measured by degree of satisfaction in general, the experience of different chamber activities, degree of impact on important lobby issues and much more,” says Katarina Nilsson, chairman of the Swedish Chamber of Commerce in China. Last autumn, an external evaluation of the business and organisation of the chamber was conducted to examine possibilities for further development in the future. It was obvious that the chamber has the opportunity and the members’ mandate for taking on a more important role for Swedish business in China, to become more professional and to create even greater value for members. The development project is already underway and will make the chamber more personal and service-oriented, improve strategies for managing important lobby issues on behalf of Swedish business and create more relevant activities for members. 38 DRAGONNEWS • NO.01/2014

Lobbying in Beijing n Improving the conditions for Swedish companies doing business in China is what the chamber’s Lobbying Committee is currently focused on. Over the past two years, the Swedish Chamber of Commerce in China has stepped up its work on influencing people who make decisions or shape opinions that affect our business climate. Since 2012, the main board has appointed a committee within the board of directors. Step by step, the Swedish chamber is positioning itself as a natural speaking partner for decision-makers and opinion leaders that can affect the business climate for Swedish business in China. The Lobbying Committee is working together with various stakeholders in order to get as much attention as possible. Among these stakeholders are the Sweden-China Trade Council in Sweden, Swedish Chambers International, the EUCC, the Embassy of Sweden in Beijing, and the Swedish Consulate General in Shanghai. Activities include: • Discussions with Sweden’s Ministry of Social Affairs on a social security agreement with China. • Discussions in Swedish media on China related issues. • Participation in the Swedish so-called political week in Almedalen, Gotland • Business Climate Survey

In memoriam: Nils Horner 1962-2014 n Swedish-British Hong Kong-based journalist Nils Horner was shot dead on 11 March by assailants in Afghanistan. He was 51 years old. Nils Horner was a well-known and much appreciated Asia correspondent for Swedish Radio. The Swedish Chamber of Commerce in Hong Kong sends its condolences to his family.

Photo: iStockphoto

Spotlight on the board: Environmental infrastructure projects

Farewell Yvonne and Johanna – Welcome Marianne n After 16 years at the Swedish Chamber of Commerce in China, Yvonne Chen is moving on to new challenges. Yvonne has been with the chamber from the beginning in 1998, when the chamber had just a few founding members compared to the close on 300 company members it has today. Yvonne has been a driving force in developing the chamber as we now know it. Johanna Pollnow, office manager at the Shanghai office, is leaving the chamber after three successful years in Shanghai, and is moving back to Sweden with her family. We are happy to welcome Marianne

Yvonne Chen

Johanna Pollnow

Westerback, who will take over from Johanna in Shanghai. Marianne is from Stockholm, and married with two children. Marianne moved to Shanghai in August 2013 from Linköping, where she had previously lived with her family. Marianne has worked in various positions at Handelsbanken. She has more than 10 years’ experience in leading positions, building strong relationships with existing and new customers, as well as staff development. We are very excited to have Marianne on board and wish Yvonne and Johanna all the best in the future.

Karl Sven Edvard Engdahl 1955-2014 Karl Engdahl and his company Kinsan was one of the 44 founding members of the Swedish Chamber of Commerce in Hong Kong in 1986.

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Welcome Felix n SwedCham Hong Kong warmly welcomes Felix Nordlind as an intern to the chamber office. Felix joined us in January and will stay for six months, after completing four months as an intern at the Consulate General of Sweden here in Hong Kong. He will, in part, be responsible for the chamber’s 100-plus Young Professionals and their events. Felix holds a Bachelor’s Degree in business and economics from Uppsala University. He has also undertaken Chinese studies both in Uppsala and Beijing. In 2011-2012, he spent two semesters as an exchange student at the University of Hong Kong. We all look forward to working with Felix while he’s here in Hong Kong.

Swedish banking in China We feel at home in the Chinese market and want you to feel the same. It’s a large and fastgrowing market. As a result, more and more Scandinavian companies need banking solutions, such as cash management, financing in local and foreign currencies, trade finance and treasury solutions in China. We’ll help you – bringing our 20 years of experience of business in China. If you have the opportunity, please visit us in Shanghai where we’ve been located since 2001.

Marianne Westerback

In memoriam:

Our friend Karl Engdahl passed away suddenly on 24 January, 2014. Karl was born in Kinna, at the time a centre for modern, quality textile design in Sweden, and where his great grandfather founded what was to become a worldwideknown textile brand, Kinnasand. Karl showed an early flair for textile design, and graduated from Borås Textil Institut in 1977, followed by a three-year stint in Economics 1978-1981 at the University of California, Los Angeles (UCLA). He arrived in Hong Kong in 1982, where he became instrumental in building and later taking ownership of Kinsan, a local powerhouse that provided the

Felix Nordlind

top-end market with world-renowned textiles and fabrics, including Kinnasand. He soon met Wendy Wan, who was prominent in the local textile industry, and they married in 1991. Karl made many friends over the years, not the least from one of his other big passions – sports. He was a fanatic, and few knew more about football, golf, F1, tennis and ice hockey than Karl – he was even known to stump the odd American on questions regarding American football, baseball, basketball, and an Aussie or two on rugby! Karl leaves behind his wife Wendy, his stepson Justin, with wife Florence and children, brother Gustav and sister Elisabeth and other family members in Sweden – plus countless friends in Hong Kong, Sweden and around the world. Sadly missed, but never forgotten – Hong Kong will never be the same without Karl. Lennart Larsson & Peter Fransson

Swedbank Shanghai Citigroup Tower 601, 33 Huayuanshiqiao Rd. Shanghai, China + 86 21 386 126 00

Photo: Claes Söderblom, IT-Bilder Stockholm

Swedish design in the spotlight

Consul general Jörgen Halldin explains the details of the Business of Design Week.

HONG KONG ORDINARY MEMBERS >>>

n On 25 February, the consul general of Sweden in Hong Kong, Jörgen Halldin, held an information session together with representatives from the Hong Kong Trade Development Council and Hong Kong Design Centre. They shared the exciting news of Sweden being the partner country of this year’s upcoming Business of Design Week (BoDW). The 75 people attending got to learn more about how their companies can be involved in BoDW, which is the world’s third largest design event and takes place in Hong Kong during the first week of December 2014.

Today Group Asia 21/F, The Phoenix, 23 Luard Road Wan Chai Hong Kong Tel: +852 5664 7172 Email: peter.thelin@todaygroupasia.com Web: www.todaygroupasia.com

Urbanisation activities in Shanghai n By 2030, Asian cities are projected to be home to some 2.6 billion people. Urbanisation in this part of the world has been rapid and dramatic. For cities to meet the challenges this kind of pressure poses, participation by all stakeholders and professionals are required. Swedish cities have also undergone fundamental transformations and introducing innovative and pragmatic solutions that are relevant to China’s current situation. In order to create a platform for exchanges and to promote Sino-Swedish cooperation, the Swedish Consulate General in Shanghai, in close cooperation with various partners, including the Swedish Chamber of Commerce, will arrange a number of activities focusing on urbanisation this March. We call the initiative “Smart Urban Living – Sino-Swedish Solutions for Cities on the Move” and the programme include seminars on air pollution, sustainable living, smart living, sustainable communications and sustainable transport solutions. For more information, please contact jenniann.eriksson@gov.se

About us Today Group Asia is mainly involved in the medical-device business. Our principle business is focused on quality assurance and regulatory affairs in the areas of project management, process development, internal and external audits, supplier assessment, product registrations and regulatory strategies. We also serve as a bridge to Asia for new and existing companies entering/working in Asia.

About us Our team provides high-quality personal-training services from our 2,000-square-foot studio in the heart of Central. The studio is fully equipped with the latest functional training equipment so that we can make the most of your one-on-one training sessions. Chamber representative Janet Wahlquist, Director/Head Trainer

Chamber representative Peter Thelin, Partner

Tax relief ruling in Swedish court

Text: Ulf Ohrling, Mannheimer Swartling

n The Supreme Administrative Court in Sweden has ruled against the Swedish Tax Authority, which has tried to introduce a new interpretation to the so called Six-Months Rule for Swedish tax residents working abroad without any clear legal support for the move. In 2010, the Tax Authority introduced a ruling that if Swedes working abroad spend more than 96 days in any given year of employment outside the country or territory in which they have their main activities, their income will be taxed in Sweden. However, the law stating that no more than 72 days can be spent in Sweden is not affected by the ruling. The 2010 ruling, which has been ruled as invalid by the court, has caused a lot of problems for Swedish expatriates who, for example, are working and being taxed on their incomes in China or Hong Kong but need to travel to other countries as part of their employment. Had the interpretation been upheld, such trips would need to be limited to avoid severely negative tax consequences. The latest decision should come as a great relief to Swedes with regional responsibilities, as they now only need to be careful how many days (no more than 72) they spend in Sweden. The Supreme Administrative Court also gave a ruling against the Tax Authority’s interpretation of the so-called One-Year Rule (the implementation of tax exemption for income in Sweden is not dependent on the income also being taxed in the other country). In this case, the Tax Authority tried to impose the 96 days interpretation, but it now seems that in such circumstances the courts will look at the situation on a case-by-case basis. 42 DRAGONNEWS • NO.01/2014

Fitness Compass 3rd floor, Waga Commercial Centre 99 Wellington Street Central Hong Kong Tel: +852 2882 2849 Email: info@fitnesscompass.com.hk Web: www.fitnesscompass.com.hk

Transmode Systems AB 9/F, Suite 131 52 Wellington Street Central Hong Kong Tel: +852 6290 4964 Email: chewpeng.healey@transmode.com Web: www.transmode.com

About us Transmode is a global provider of packet-optical networking solutions that enable fixed line and mobile network operators to cost effectively address capacity needs created by rapid growth in video and data traffic. Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ OMX Stockholm Exchange (TRMO). Chamber representatives Rudi Yu, Sales Director Roger Lindbergh, Customer Service Director

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Gaia Leadership Company Limited Suites 3313-17, Jardine House 1 Connaught Place Central, Hong Kong Email: jan.bostrom@gaialeadership.com karla.sahlin@gaialeadership.com Web: www.gaialeadership.com

About us Since we began in 1998, we have created outstanding results for organisations and individuals in partnership with our clients. We have supported thousands of top to first-line managers to create a Gaia business culture, in trade, industry and the public sector – a business culture with leadership that focuses on interaction within the organisation and with the market, for growth and sustainable results. Our team comprises 38 senior consultants with extensive experience in senior management positions and in the leadership area. We are involved in business development, management-team development, individual coaching and leadership training. We work with customers worldwide, in Asia, Europe and North America. Chamber representatives Jan Boström, Founder Tel: +46 70 522 6422 (Sweden), +86 186 0210 1421 (China) Karla Sahlin, Senior Leadership Adviser Tel: +46 70 520 7172 (Sweden), +86 155 0210 8421 (China)

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CHINA ORDINARY MEMBERS >>>

Districom Group Suite 1617, Guangming Hotel Office Tower No 42 Liangmaqiao Road Chaoyang District Beijing 100125 Tel: +86 10-8441 8668 Web: www.districomgroup.com

Gränges Aluminium (Shanghai) Co, Ltd No 1111, Jiatang Highway Jiading Shanghai 201807 Tel: +86 21 5954 1111 Web: www.granges.com About us We produce aluminium products for the heat-exchanger industry.

About us Districom is a consultancy offering business-performance management solutions. We serve clients in the areas of distribution, and sales and marketing across various industries, with a special focus on the automotive sector. Districom offers business strategy and process definition services, operations improvements and business intelligence solutions. We use the leading Swedish business-intelligence software QlikView as a tool of choice and are an authorised re-seller in China.

Chamber representatives Johan Menckel Email: info@granges.com Mobile: +86 156 0181 8227

Rubber Products Plastic Products Flexible hoses Assembly Block C5, Suhong Industrial Square, 81 Suhong West Road SIP, 215021 Suzhou, P.R. China usz@unimer.se, www.unimer.cn

Phone: +86 152 5009 5190 Phone: +86 189 3459 9953

Chamber representative Peter Hage Email: ph@districomgroup.com

Hanza Alfaram Electric (Suzhou) Co, Ltd Building #86, Dongjing Industrial Square No 8, Dongfu Road Suzhou, Jiangsu Province 215123 Tel: +86 512 8816 5778 Fax: +86 512 8885 9859 Web: www.hanza.com

About us Hanza provides mechanics, electronics, cables and boxbuild assembly. This enables customers to reduce the amount of suppliers and focus on continuous cost and quality improvements in a partnership model. Chamber representatives Jem Shen, Deputy General Manager Email: jem.shen@hanza.com Mobile: +86 137 7181 1216 William Luo, Sales Engineer E-mail: William.Luo@hanza.com Mobile: +86 158 5035 0092

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EQ Bridge Solutions Limited 58 Tai Cang Rd Shanghai 200021 Tel: +86 21 6567 6879 Web: www.eqbridgesolutions.com

Se till att ha en duktig rådgivare som har tillgång till många specialister

About us EQ Bridge Solutions Limited (EQBS) is a Chinese-Swedish consultancy offering engineering services in the transport sector, including automotive, commercial vehicles, and boat and yacht design. EQBS has expertise from pre-studies to full production and will be your partner regardless of your needs. Our consultants cover experience and know-how ranging from styling, product development to production engineering. EQBS´ goal is to design and develop products that meet and exceed requirements and industry standards in close collaboration with our clients. With a global network, Eric Pedersen, we believe that we are very well suited to offer you and your Private Banker company the best possible consultants and solutions for your demanding projects. We are your cross-cultural partners. Chamber representatives Anders Ekelöf, Director Email: anders.ekelof@eqbridgesolutions.com Mobile: +46 73 592 77 00 Joseph Qiao, Managing Director Email: joseph.qiao@eqbridgesolutions.cm Mobile: +86 181 0181 8459

Förmögenhetsrådgivning, när den är som bäst, inkluderar med andra ord allt som kan påverka din personliga förmögenhet, nu och i framtiden. Vi har kompetensen och de tekniska systemen för att kunna ge dig den bästa servicen som finns att få. Och framförallt – genom att vara en stor bank har vi möjlighet att erbjuda dig de bästa specialisterna. En personlig rådgivare, många specialister – gör det möjligt. Besök oss på www.nordeaprivatebanking.com eller ring kontoret i Singapore på +65 6597 1082, så bokar vi ett möte.

Jonas Bergqvist, Private Banker

Nordea Bank S.A:s Singapore-kontor ingår i Nordea, den ledande finanskoncernen i Norden och Östersjöregionen. Vissa tjänster och produkter som beskrivs i detta material är eventuellt inte godkända för försäljning i vissa länder. Huruvida du kan eller bör köpa en produkt kan bland annat bero på din riskprofil och lagen i det land där du är bosatt. Detta material ska inte betraktas som ett erbjudande om att köpa eller sälja någon placeringsprodukt eller att göra någon annan affär. Det ska inte heller betraktas som ett erbjudande att tillhandahålla banktjänster i något land där Nordea Bank S.A:s Singapore-kontor eller något av dess närstående bolag inte har tillstånd att bedriva bankrörelse. Publicerad av Nordea Bank S.A., R.C.S. Luxembourg no. B 14.157 för Nordea Bank S.A., Singapore-kontoret, 3 Anson Rd #20-01, Springleaf Tower, Singapore 079909. www.nordeaprivatebanking.com AD_Dragonnews_210x140_swe_Jonas_2014.indd 1

25/02/2014 11:21

TAIPEI ORDINARY MEMBERS >>>

Norlander Produktionsutveckling AB Apartment 1101, Building C, Entrance 1 Lanchuo Mingzuo No 9, Jiqingli, Chaoyang District Beijing 100020 Tel: +86 186 1280 1930 Web: www.npuab.se

About us ISS offers a wide range of facility-service solutions from facility management, property management, cleaning and security to fully integrated facility services (IFS) that combine all of your service- and support-function needs into one single solution. ISS serves numerous industries, including commercial, healthcare, retail, manufacturing and residential. Some of the representative clients are TMT, Pacific SOGO Department Stores and five renowned international banks. M

Chamber representatives Jim Hill, General Manager Email: jim.hill@santaferelo.com.tw Christy Tsao, Business Development Manager Email: christy.tsao@santaferelo.com.tw

46 DRAGONNEWS • NO.01/2014

About us The Santa Fe Group offers professional relocation, moving and records management services through 122 offices in 52 countries. Through our global network we cover the world, and are able to handle all relocation needs such as moving, real estate, and visa and immigration services.

Chamber representative Mark Delaney, Commercial Development Manager Tel: +86 21 2310 8076 Fax: +86 21 6391 2939 Mobile: +86 139 1771 8232 Email: mark.delaney@gac.com

Beijing Ruitengmao Energy Conservation Technology Co, Ltd Room 615, 6th floor, CYTS Plaza No 5, Dongzhimen Nandajie Dongcheng District, Beijing 1000027 Tel: +86 10 5815 6510 Web: www.termoekonomi.se/Home.html

Santa Fe Relocation Services Taiwan Co Ltd 13-4 F, No 141, Keelung Rd, Sec 1 Xinyi District, Taipei 11070 Taiwan Tel: +886 2 2749 4420 Web: www.santaferelo.com

About us GAC managers and staff emphasise human dignity as a core value in our operating philosophy. We value longterm relationships with business partners, customers and suppliers and seek win-win solutions to the challenges of modern business. GAC’s 8,000 staff is in close to 300 offices worldwide and speaks more than 100 languages. Headquartered in Dubai, the group is local in action and global in attitude. Since its establishment by Swedish transport interests in 1956, GAC has grown to become a leading global independent provider of shipping, logistics, marine and related services. For more information, visit www.gacworld.com.

Chamber representatives 1 Chen Lei, General Manager Email: siljaline-cn@hotmail.com Mobile: +86 138 0111 8612 2 Yang Ronghua Email: lilyyrh@126.com Mobile: +86 139 1116 55593

GAC Forwarding & Shipping (Shanghai) Ltd. 9th floor, Hongyi Plaza No 288, Jiujiang Road Shanghai 200001 Tel: +86 21 2310 8000 Web: www.gac.com

About us We are the leading provider of high-quality mini-cruise and passenger transport services in the northern Baltic Sea region, as well as the leading provider of ro-ro cargo services on selected routes. Please contact us for reservations of tickets, groups and conferences, city breaks, car package and hotels in Scandinavia.

Chamber representative Olov Norlander Email: olov@npuab.se Mobile: +86 186 1280 1930

ISS Facility Services Ltd 10F-1&2, 20 BaDe Rd, Sec 3 Taipei 10559, Taiwan Tel: +886 2 2577 4888 Fax: +886 2 2579 8832 Web: www.issworld.com.tw

CMY

About us We have a big network of suppliers in China within a wide range of products, materials and production methods. Working with our partners in China, we can provide highquality products and services to our Swedish customers, who for the most part are in the manufacturing industry.

Tallink Silja OY PO Box 100, FI-00181 Helsinki, Finland Beijing office: A-607, Xintiandi No 1, Xibahe South Road Chaoyang District, Beijing 100028 Tel: +86 10 6446 5257/58/59 Fax: +86 10 6446 5323 Web: www.tallinksilja-cn.com

Chamber representative Peter Trampe, Country Manager Email: peter.trampe@issworld.tw

TAIPEI INDIVIDUAL MEMBER >>> 1

Joel Benge Email: joel.benge@awbevs.com Tel: +886 978 033 911

About us We are a subsidiary of Termoekonomi AB, which focuses on four different technical areas and performs all development steps of a project. Termoekonomi/RTM always take a systemic approach and focus on optimisation and development of the most efficient configuration for the overall energy scheme. Chamber representatives 1 Zhang Chong Email: zhang.chong@termoekonomi.se Mobile: +86 158 1048 2624 2 Tan Lei Email: tan.lei@termoekonomi.se Mobile: +86 130 1029 1870

CHINA ASSOCIATE MEMBER >>> Fredrik Berchtold Apt 402, Blk10-2, Dynamic Town#2 2 Longpingnan Lu, Fenggang, Dongguan 523000 Dongguang, Guangdong Province Mobile: +86 135 3084 4090

Josefine M. Mosse josefine@executivehomes.hk

DRAGONNEWS • NO.01/2014 47

After hours

Doing business in Sweden?

n Dance Let your body move and groove Dancing is not only fun but also a great way for your child, or yourself, to get fit. If you live in Hong Kong and would like to try out jazz dance or hip-hop, you can contact Lisa B Academy of Jazz. Lisa B is a dance studio in Tsuen Wan that provides classes for students aged from just 16 months to teens and adults. It is owned and operated by Lisa Bergström, who grew up in Gothenburg, Sweden, but moved to Hong Kong at the age of 12, which is when she started her dancing career. At the age of 15, she began teaching dance at the Sonia Herron Academy of Jazz in Ma On Shan, and she has also studied for one year at the Broadway Dance Centre in New York City. Lisa B Academy of Jazz offers classes in jazz, hip-hop, jazz-funk, theatre,

ballet, “baby dance” and Pilates – or a combination of them. Free trial classes are offered for all courses, so if you’re in the mood to groove, just give them a call or drop by to book an appointment. In early March, Lisa and some of her colleagues also gave a much-appreciated performance at the Swedish Chamber of Commerce’s “Pearl of the Orient” gala dinner. Address: Room 1520, Nan Fung Centre, 264 Castle Peak Road, Tsuen Wan (close to the MTR station), Hong Kong Phone: +852 3488 1949 Email: info@lisabacademyofjazz.com Web: www.lisabacademyofjazz.com

banking and finance company law and corporate finance distribution and agency law property lease law china desk environmental law corporate reconstructuring eu and competition law maritime and transportation law real estate and construction law employment law mergers and acquisitions insurance intellectual property marketing and media law international law energy and investment law it and telecom litigation and arbitration private equity

Lawyers you want on your side

n Art Affordable photography art

n Cafés Beijing café with a Nordic touch “Idag” is a newly opened café with a Nordic flavour located in the Apple Community on the first floor of the Beijing Today Art Museum. The name of the café is Swedish and means “today”. The chief Chinese founders were inspired by Nordic food culture, the Nordic healthy lifestyle and by Scandinavian minimalistic design. On the menu, you will find high-quality coffee, tea, sandwiches and innovative pancakes that include salmon, for example. If you don’t care for Nordic food, you will also find some local favourites. Address: Apple Community, eastern side of the first floor, Building 4 -Today Art Museum, No 32 Baiziwan Road, Chaoyang District, Beijing Phone: +86 10 5876 9680 WeChat: idagcafe一道咖啡

48 DRAGONNEWS • NO.01/2014

The Swedish entrepreneur Erik Leksell, together with his friend Arthur de Villepin, recently opened Asia’s first YellowKorner store at the IFC Mall in Hong Kong. Additional store openings are planned for Taipei and mainland China in order to democratise art photography and make it more accessible. YellowKorner was created in 2006 by two Frenchmen, Alexandre de Metz and Paul-Antoine Briat, who have both been lovers of photography from a young age. The YellowKorner concept is very simple: to introduce the greatest photographers worldwide and to increase the number of copies of their work, making prints accessible to as many collectors as possible. In other words, rather than offering 10 prints at US$5,000, YellowKorner publishes 500 at US$100. Address: Shop 3022B, Level 3, IFC Mall, 8 Finance St, Central, Hong Kong Phone: +852 3406 3122 Web: www.yellowkorner.com

Clean Healthy Air 24/7

= Life insurance and Higher Performance

At Home • Kindergarten/School/High School/University • At Work

EAS Beijing Office, China, Mr Shangyou Dong, Manager, Ph: 0086 10 85322147,Cell: 0086 135 2199 5330, Mail: shangyou.dong@easab.com

SWEDEN HQ Environmental Air of Sweden AB. Mr Göran Hertzberg, M D, Ph: 0046 761 048 350, Mail: info@easab.com

www.easab.com

T he ch a mber a nd I Favourite Swedish and Chinese brands The theme for this issue’s cover story is quality, so Dragon News asked some members about their favourite brands. These were the questions: 1. What Swedish brands represent high quality to you and why? 2. Are there any Chinese brands that represent the same level of quality? And below are the answers.

Charlotta Lagerdahl Gandolfo

Maud Paulsson RNB Far East, Hong Kong 1. “I am personally very fond of Swedish brands such as Acne, J Lindeberg, Whyred, Filippa K and House of Dagmar because of their simple Scandinavian designs, but also their choices when it comes to material and quality. I also must admit that I do think H&M is very good too. “Most Swedish companies share strong beliefs in social compliance, and Sweden is a country with stringent rules and requirements when it comes to chemicals in clothing – this all adds up to good quality for me.” 2. “I am sure there are many! I’m a big fan of the Hong Kong company, Shanghai Tang.”

MSL Group, Shanghai 1. “I think the Swedish brand Baby Björn, as well as another Swedish brand for baby care, Naty, well represents Swedish quality where it is most important.” 2. “Shang Xia is building on 5,000 years of unique heritage and quality, and is founded by a Chinese designer, but it was cultivated by Hermés. In terms of pure home-bred Chinese brands, I think WeChat (Tencent) has leapfrogged the competition in terms of mobile messaging, really taking the platform to a new level – definitely a sign of quality!”

Chris Magnusson Swedbrand, Shanghai

Katarina Ivarsson Boris Design Studio, Hong Kong 1. “Spotify delivers a high quality music service to music lovers everywhere. Their set up makes music more accessible and they continue to improve their offerings by continuously listening to the input of their users. It’s a service that showcases Sweden as innovative and business pro-active, with a truly international mind-set!” 2. “WeChat, The No 1 communication service brand in China, offers a communication experience that is above average, their way of inventing within their service sector is amazing. You can even hand out red envelopes [laisee or hongbao] at Chinese New Year through WeChat. It’s the future in the making.”

1. “Electrolux has a strong global presence, a well established brand, and is well known for making high-quality home appliances that its customers can trust.” 2. “Haier has, in a few decades, gone from not only being a trusted local brand, it has gone global, and is already competing with highquality companies such as Electrolux.”

Björn Wetterström Nefab, Shanghai 1. “Ericsson and Scania are world class companies with a strong focus on quality and environmental sustainability.” 2. “Haier is a market-leading company in the home-appliances sector, shrugging off their ‘Made In China’ image many years ago.”

Louise Wikström Ekpac Asia 1. “IKEA gives value for money, consistent quality and in Asia the added bonus of assembly services. POC’s bicycle and ski helmets are gaining worldwide acclaim thanks to exceptional design and the company’s commitment to safety.” 2. “The value-for-money and consistentquality award goes to Xiaomi MI-one, which has achieved parity with other top-end smartphones in terms of design and function, but at a fraction of the price. Within the bicycle equipment area I would pick the Taiwanese bicycle manufacturer Giant for exceptional design and quality.”

Jerry Zhao HMS Industrial Networks, Beijing 1. “ABB (for industry) and Tetra Pak (for consumers) represent high quality, also featuring high-tech and innovation.” 2. “Some Chinese electronics manufactures have world class quality, including Huawei and Lenovo.”

Evelina Gunnarsson Young Professionals, Beijing 1. “Filippa K is a high-quality fashion brand, with excellent products made from the best materials. Their minimalist design is also very appealing. Filippa K also embraces corporate social responsibility (CSR) and environmental awareness, which I believe is very important in this day and age.” 2. “I recently learned about Qoros and I think it’s very important in the area of traffic safety, and the company is highly rated by the car safety assessment programme, Euro NCAP. Qoros has over 250 Western specialists. A number of them are Swedish, which I think will make Qoros and their concept very strong in the future.”

Swedish Chamber of Commerce in Hong Kong

Swedish Chamber of Commerce in China

DIRECTORS OF THE BOARD Ulf Ohrling, Chairman [Mannheimer Swartling] Jimmy Bjennmyr [Handelsbanken] Carl Christensson [Skandinaviska Enskilda Banken] Eva Henriksson [Henriksson Consulting] Walter Jennings [Kreab Gavin Anderson] Staffan Löfgren [ScanAsia Consulting] Laurence McDonald [Ericsson] Kristian Odebjer [Advokatfirman Odebjer Fohlin Fitzgerald] Per Ågren [APC Asia Pacific Cargo]

DIRECTORS OF THE BOARD Katarina Nilsson, Chairman [Advokatfirman Vinge] Lars-Åke Severin, Vice Chairman and Chairman of the Beijing Chapter [PSU] Ulf Söderström, Vice Chairman and Chairman of the Shanghai Chapter [SCA] Fredrik Ektander, Treasurer [SEB] Yvonne Chen [GM, Swedish Chamber of Commerce in China] Birgitta Ed [Six Year Plan] Karine Hirn [East Capital] Peter Idsäter [Mannheimer Swartling] Daniel Karlsson [Asia Perspective] Tom Nygren [Ericsson] Martin Pei [SSAB] Peter Sandberg [Tobii]

50 DRAGONNEWS • NO.01/2014

Jimmy Bjennmyr Head of Corporate Banking Hong Kong Branch

Mikael Westerback Head of Greater China and General Manager Shanghai branch

Florence Chan Senior Account Manager Hong Kong Branch

Johan AndrĂŠn Deputy Head of Greater China and General Manager Hong Kong branch