Dragon News - No. 4, 2014

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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.04

2014

22

Ulf Sรถderstrรถm Expecting solid growth in China

24

Ida Collins Baking from the heart

28

Jan Carlzon Leadership by love

No way back for the Shanghai FTZ Even if the Shanghai Free Trade Zone has yet to live up to expectations, China has given positive signals in terms of carrying out the major reforms that the country needs in order to move forward.

Publisher The Swedish Chambers of Commerce in Hong Kong and China For advertising inquiries, please contact respective chamber’s office The opinions expressed in articles in Dragon News are those of the authors and do not necessarily reflect the views of the publisher.

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: iStock 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 Email: chamber@swedcham.com.hk Web: www.swedcham.com.hk General Manager: Eva Karlberg Marketing Manager: Louise Herrlin Finance Manager: Anna Mackel 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 Email: info@swedishchamber.com.cn Web: www.swedishchamber.com.cn Office Manager Beijing: Karin Roos Webmaster: Jaycee Yang Finance Assistant: Klara Wang Shanghai contact Office Manager Shanghai: Marianne Westerback Event Manager: Emma Gunterberg Sachs Tel: +86 21 6217 1271 Fax: +86 21 6217 0562 Mobile: +86 1368 179 7675 Email: shanghai@swedishchamber.com.cn

CONTENTS

No.042014 10

4

Editorial

6

Opinion: Claes G Alvstam

8

Snippets

10 Cover story: No way back for the Shanghai FTZ 22 Executive talk: Ulf Söderström

22

24 Young Professional interview: Ida Collins 28 Feature: Jan Carlzon 30 Chamber activities in Hong Kong

24

32 Chamber activities in Beijing 34 Chamber activities in Shanghai 36 Chamber activities in Taipei 38 Chamber news

28

42 New members 48 After hours 50 The chamber and I: Members view on internet Swedish Chamber of Commerce in Hong Kong

Swedish Chamber of Commerce in China

ADVERTISERS APC Logistics page 35, Asia Perspective page 25, Bamboo page 21 B&B Tools page 51, Finnair page 2, Ericsson page 19, Executive Homes page 40 Geodis Wilson page 17, Greencarrier page 20, Handelsbanken page 52 Hellström page 49, Iggesund Paperboard page 45, IKEA page 27

Thank you!

APC Logistics for your immense generosity shipping and distributing Dragon News in China, Hong Kong, Asia and Sweden.

Sigtuna Boarding School page 47, Swedbank page 41, Unimer page 37

Iggesund Paperboard for being the proud sponsor for the paperboard cover sheet of Dragon News magazine in 2012.

Cover printed on Invercote® Creato 220gsm.

Vinge page 15, Volvo page 39

The Swedish Chambers of Commerce in Hong Kong and China

Mannheimer Swartling pages 31, Nordea page 49, Radisson Blu page 18 SCA page 33, Scania page 9, SEB page 5, Segre page 8

DRAGONNEWS • NO.04/2014 3

EDITORIAL

Katarina Nilsson Chairman Swedish Chamber of Commerce in China

Ulf Ohrling Chairman Swedish Chamber of Commerce in Hong Kong

Clouds – but are there silver linings?

Dear Reader, This issue of Dragon News deals with China’s future. Will the China Dream have a positive impact on Swedish businesses operating in the country? What can be expected to happen over the next two or three years?

We know all too well the challenges currently facing foreign companies and foreign-invested companies in China: open or hidden barriers to trade, bureaucratic obstacles, visa issues, IP theft and pirating, lack of rule of law and enforcement of arbitration awards and court decisions, internet and media censorship, investigations from the NDRC and the IAC of foreigninvested companies while domestic companies seem to get off the hook (at least according to the European Chamber of Commerce), unreasonable joint-venture partners, corruption, lack of breathable air, general pollution of water and soil, lack of food safety, financing problems, rapidly increasing salaries and other costs, customs procedures, lower margins and a general slow-down of the economy. All these issues are making it difficult to do business in China, as well as making it hard for China to integrate with the globalised economy.

But let’s focus on the bright side and see if there is good news. The sad condition of the environment and investment programmes in the healthcare sector have created huge 4 DRAGONNEWS • NO.04/2014

business opportunities for Swedish companies, which have a good reputation in these areas.

Concerns about food safety situation also means there are good opportunities in terms of food and water exports. Meanwhile, the anti-corruption campaign may well pave the way for a more level-playing field, more transparent competition and benefits for customers and businesses.

The Pilot Free Trade Zone (FTZ) in Shanghai that was introduced more than a year ago promised much, but has so far fallen short of the promises made. The FTZ was felt by some to be a threat to Hong Kong’s role as China’s international financial centre, but that has failed to become an issue, at least in the way it is presently operating. For this to change, a radical overhaul of the FTZ would be necessary.

As for Hong Kong, its role is threatened by the white paper issued before the summer that stated – more or less – that Hong Kong is simply another city in China, while also describing Hong Kong judges as administrators who should be patriots. The use of the word “administrator” was later blamed on a translation error, but no clarification has been given regarding the use of the word “patriotic”. If the standards historically set by many mainland judges were to be adopted in Hong Kong, the territory’s unique selling point as a bastion of rule of law would be voided.

Contrast this with the reports from

the Fourth Plenum, which suggest that we can look forward to a more efficient and professional – although not independent – judiciary. Wouldn’t it be ideal if the rest of China could, rather, learn from the example of Hong Kong?

The protest movement raises the question of whether democracy is really such a threat? It has been claimed that the poorer segments of Hong Kong’s population are not ready for it. There are many reasons such a statement doesn’t hold water. To take Sweden alone, we have had a system of one person/one vote for almost 100 years – since a time when the country was far from being as developed as it is today – and business is thriving. Switzerland has an even more direct democracy, with frequent referendums on very minor issues, and it has not suffered severely economically as a result. Both countries have very little social unrest. Illegal protests and disturbances can be dealt with efficiently as the governments have been democratically elected and have popularly supported mandates rule together with genuine accountability.

Why not let Hong Kong develop into a Pilot Free Democracy Zone (FDZ) in China?

China would not have much to fear from such an experiment, and it would be in line with most Hongkongers expectations, making it easier for them to love Hong Kong and love the country.

in the years since, and it is clearly possible that a “single ASEAN market” may be as remote when the organisation celebrates its halfcentury jubilee in 2017, as it was when the AEC was first formulated.

Photo: iStock

The 10 member countries of the Association of Southeast Asian Nations (ASEAN) need to climb the value chain and to reduce their present dependence on exports, says Claes G Alvstam, who analyses the chances that the ASEAN countries will reach further agreements with their neighbours.

ASEAN: Yesterday, today and tomorrow TEXT: Claes G Alvstam, claes.alvstam@handels.gu.se

6 DRAGONNEWS • NO.04/2014

T

he annual summit meeting of the Association of Southeast Asian Nations (ASEAN) took place in mid-November, this time in the recently built capital of Myanmar, Naypyidaw. The meeting, held in the country formerly known as Burma, was particularly important in several respects.

For many years, ASEAN has tried to avoid giving the military regime of Myanmar a too visible role. Even though the “Asian Way” mantra is usually interpreted as non-interference in internal affairs among the member states, it has nevertheless been embarrassing to host a member state that has has flagrantly obstructed human rights and basic democratic principles. However, since the new leader, Thein Sein, has recently introduced limited democratic reforms, it has become easier for the other member states to accommodate Myanmar and meet on its home turf.

The meeting was extraordinary insofar as there is not normally a US president present. But since it neatly slotted between the APEC conference in Beijing, and the G20 Summit in Brisbane, Australia, it gave President Barack Obama a welcome opportunity to make amends for not attending the gathering of Asian top brass in 2013. Since ASEAN Summits are organised together with a number of parallel meetings with “dialogue partners”, they provide the opportunity to meet with leaders from China, Japan, South Korea and other countries.

This year’s meeting was also particularly important as the “magic” year of 2015, when the ambitious project of creating an ASEAN Economic Community (AEC) is planned to come into fruition. Even though everybody concedes that economic integration – the architecture for which was laid down on ASEAN’s 40th anniversary in 2007 – is unlikely to fully materialise in the near future, adhering to the idea is considered important. Integration has faced many hurdles and setbacks

What are the biggest political and economic challenges for this community of 620 million people, with an economy that is 25 per cent larger than India’s in nominal terms? As usual, the grand geopolitical picture is complex – a mixture of social differences and economic and commercial realities. ASEAN’s intra-regional trade during its 47 years of existence has increased from 15 per cent to about 28 per cent.

This modest achievement is even less impressive on consideration that the lion’s share of this intra-regional trade actually takes place within the Indonesia-Malaysia-Singapore “triangle”, and that the efforts to integrate less-developed member states have been far too slow. Vietnam provides the only example of a higher rate of growth in terms of foreign trade, but it started out from a lower level.

In the absence of an efficient multilateral trade order – that is the World Trade Organisation (WTO) – that is able to strike global deals and promote liberalisation of trade in goods and services, various regional free trade agreements (FTAs) and broader economic partnership agreements have mushroomed in the Pacific Asia. ASEAN’s own FTA, the AFTA, which was introduced almost 25 years ago, has certainly seen in progress in several areas, but implementation has in general been too slow, dashing the hopes and exceptions of new members.

Even though it is conventional wisdom that China is increasingly becoming the region’s chief engine of economic and political power, it should be seen in relation to the parallel stagnation and decline of Japan. Given that decline, the People’s Republic of China (PRC) has been eager to forge closer economic bonds with its regional neighbours through far-reaching bilateral trade agreements – for example, the ASEAN-China Free Trade Area (FTA).

In the most recent APEC meeting, President Xi Jinping signalled that the sprawling areas covered by AFTA and the Pacific (FTAAP) should be given higher priority. This initiative incorporates almost the entirety of the Asia-Pacific and is a pipedream, at least in the short term, but its symbolic significance for Chinas in terms of cementing its regional dominance should not be underrated.

Dr Claes G Alvstam holds the Ragnar and Torsten Söderberg rotating chair in economic sciences, and is a professor of international economic geography at the School of Business, Economics and Law at the University of Gothenburg, Sweden. He is also currently Director of its Centre for International Business Studies, and has published widely within the fields of international trade, foreign direct investment, international business and economic integration in Europe and Asia. He has also been visiting professor at universities in China, Japan, Malaysia and Thailand.

Income per capita GDP in Singapore is 22 times greater than in Laos.”

international trade – from “trade in products” to “trade in tasks”.

That shift has seen production specialise and fragment into complex global value chains, with increasing added value in the various services embedded in physical manufacturing.

Another shift of focus has been from conventional tariffs to more elusive technical trade barriers – rules and regulations regarding technical harmonisation and standardisation, public procurement, investment practices and mobility of capital. ASEAN countries need to climb the value chain and to reduce their present dependence on exports of semi-manufactured products, and parts and components for final assembly in China, At the same time, China wants to avoid being while also supporting the development and out-manoeuvred by the US-led initiative Transinternationalisation of its “national champions” so as Pacific Partnership (TPP), a trade deal that includes to allow them to become globally competitive.

12 countries, but is reluctant to face the fact it could The year, when the highly One of ASEAN’s main challenges is facilitating feasibly become a reality. The prospects of success for ambitious project of creating an this process and at the same time reducing the wide the TPP are realistically low, but it has nevertheless ASEAN Economic Community economic gap between its member states – income already impacted the landscape of free trade areas (AEC) is supposed be launched. per capita GDP in Singapore is 22 times greater than in the region. Besides dividing ASEAN, only four in Laos, measured in purchasing-power parity terms, member states – Brunei, Malaysia, Singapore and for example. All the above issues will be fixtures in upcoming ASEAN Vietnam – have joined the talks. This has led to uncertainty about the summit meetings. Their complexity should not be underrated, but it positions of other important regional trading powers, such as South is also worth bearing in mind that the organisation has managed to Korea, Hong Kong, Taiwan and India. muddle through a half-century of largely peaceful co-existence from a From an ASEAN perspective, long-term strategy for further shaky start in the 1960s. economic integration is lacking. Should China be seen as a “threat” ASEAN will obviously maintain its important role between larger or an “opportunity”? Should the organisation give priority to an powers, but should also be more aware of its own potential, not only ASEAN+3 (the PRC, Japan and South Korea) and in the longer term regionally, but also on the global arena. In other words, it may be time an FTAAP, or would the strategy be better formulated to aim at TPP to rediscover this sometimes overlooked part of the world. b membership for the presently excluded member states? An additional issue is the lack of consensus on the complex territorial conflicts in the South China Sea. The same applies to Sino-Japanese antagonism over This is ASEAN the Diaoyu/Senkaku islets.

2015

Meanwhile, the major transformation that has undergone the Asian economies over the past decade is a shift in the terms of

The ASEAN countries consist of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

DRAGONNEWS • NO.04/2014 7

Anti-corruption Snippets Fraud investigator sentenced to prison n In August 2014, the British corporate investigator, former Reuters correspondent and long-time China resident Peter Humphrey was sentenced by a court in Shanghai to two-and-ahalf years in prison for “illegally obtaining private information” by violating a new law aimed at curbing corporate investigations.

His American wife Yu Yingzeng got two years in prison. They were arrested in July 2013 after completing an internal probe for the pharmaceutical company GlaxoSmithKline (GSK) in China.

GSK has itself been the target of a separate corruption probe into allegations it paid as much as three billion yuan in bribes to doctors and officials in China to win sales. In September, GSK was fined the same amount by a Chinese court.

Humphrey is the founder of the risk management consultancy

QUOTE

“In order to fight against corruption, a person’s life and death, personal praise or blame, do not matter.”

President Xi Jinping explains that he will combat “armies of corruption” at the risk of damage to his reputation, or even his life.

8 DRAGONNEWS • NO.04/2014

Over the years, Peter Humphrey has been an appreciated speaker at Swedish Chamber of Commerce seminars.

ChinaWhys and has decades of experience of helping multinational companies in Asia to cope with white-collar crime prevention, fraud investigation and crisis mitigation. He has also been an appreciated speaker at seminars arranged by the Swedish Chamber of Commerce.

The arrests and sentences came as a surprise to foreign observers because Humphrey’s activities were not particularly unusual in China. Most multinationals employ due diligence firms to keep tabs on their operations and partners.

Did you know … n … that foreign businesses have come under pressure in China, where regulators are attempting to level the corporate playing field by using anti-trust laws against multinational companies?

Chinese authorities have been launching probes of corporations such as Audi, Mercedes, Microsoft, Qualcomm and others.

The American Chamber of Commerce, the European Chamber of Commerce, and the US-China Business Council have all publicly expressed frustrations over the Chinese government’s targeting of particular firms, denying access to legal counsel, a lack of due process and transparency, and the seemingly arbitrary imposition of fines and other punishments.

No way back for the Shanghai FTZ Even if the Shanghai Free Trade Zone has yet to live up to expectations, China has given positive signals in terms of carrying out the major reforms that the country needs in order to move forward.

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

F

or many years, the Waigaoqiao Free Trade Zone (FTZ) in Shanghai’s Pudong district was the place to be for foreign manufacturing companies that wanted to bring machines and goods in and out of China with less bureaucratic red tape and lower customs tariffs than outside the zone.

10 DRAGONNEWS • NO.04/2014

The Waigaoqiao FTZ opened in 1990 and was the first of its kind in China.

It attracted tens of thousands of foreign companies and offered customs and tax benefits to manufacturers and traders.

Many Swedish companies were early to establish themselves in Waigaoqiao, among them Alfa Laval, Sandvik, SKF, Tetra Pak, Volvo, and several others.

The Waigaoqiao FTZ incorporated various functions including free trade, export processing, logistic warehousing and bonded commodities.

Many similar zones followed and were set up all over China.

Designed to be not only a zone for free trade but also as a testing ground for further economic reforms, the China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ) was inaugurated on 29 September 2013. It covers an area of almost 29 square kilometres, and consists of four existing bonded zones: Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Pudong Airport Comprehensive Free Trade Zone and Yangshan Free Trade Port Area.

Beijing’s intention was to create a “miniHong Kong” and reinforce Shanghai’s bid to become a global financial centre. Beijing promised to make the yuan convertible in

the zone, implement interest-rate reforms, give market forces full play – and even allow access to Facebook and other normally blocked websites.

“What makes the Shanghai FTZ different from all the others is that it is a pilot scheme for other types of reforms, including financial reforms,” says Fredrik Hähnel, general manager of SEB in Shanghai.

President Xi Jinping urged local governments to expand the pilot scheme of the Shanghai FTZ to other parts of the country, in a move similar to that of former paramount leader Deng Xiaoping in 1980, when he initiated the Shenzhen Special Economic Zone (SEZ), allowing foreign firms to use low-cost Chinese labour for manufacturing there. The SEZ was a huge success and was copied elsewhere, helping to turn China into a manufacturing powerhouse and the world’s second largest economy.

“You should, however, bear in mind that the Chinese economy looked very different in the 1980s compared to today and it was much easier to carry out complicated reforms,” says Christer Ljungwall, head of the office of science and innovation at the Swedish Agency for Growth Policy Analysis in Beijing. “Today, China’s economy is much

Four Chinese virtues (4) Over thousands of years of history, the Chinese have formed a moral code that has played an important role in 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 content of the magazine: l (proper behaviour), xiào (filial piety), rén (benevolence) and dé (a power that shows the way).

In this issue we have come to dé which in Chinese philosophy is described as the inner moral power through which a person may positively influence others. Our cover story starts to analyse the Shanghai Free Trade Zone, which was hyped as a laboratory for economic reform when it opened a little more than one year ago. We will take a look at what actually happened and at other necessary reforms that China needs to carry out to move forward.

DRAGONNEWS • NO.04/2014 11

The most important thing about the FTZ is that it becomes a catalyst, or a spark, for national reforms, rather than becoming a substitute for reforms.”

Fredrik Hähnel, SEB

A tip of the iceberg?

The current anti-corruption campaign has gone far deeper and lasted far longer than anyone could have imagined.

• Rui Chenggang, a popular CCTV host of a business program, famous for his nationalist criticism of a Starbucks’ coffee shop’s presence in Beijing’s Forbidden City.

• Following Wei Pengyuan’s arrest, 11 other NDRC officials have been detained including the Liu Tienan, the head of the During a raid on a flat owned by a mainland energy official, Wei commission’s energy bureau.

Pengyuan of the powerful economic policy planning agency, • Add to that the former railway minister Liu Zhijun, who in 2013 the National Development and Reform Commission (NDRC), the was given a suspended death sentence for his part in a corruption investigators found more than 200 million yuan stashed in cash. scandal. Liu was the man behind the country’s high-speed rail project.

“It marks the largest amount of money in cash we have seized Some observers see the crackdown as a way for Xi Jinping to from a corrupt official during a single operation since 1949,” said destroy his enemies and consolidate his power. All the same, no Xu Jinhui of the Supreme People’s Procuratorate which oversees other similar campaign in China has been so far-reaching. the handling of graft cases.

“The anti-corruption campaign has gone far deeper and lasted Wei was found to have bought several flats and used one of far longer than anyone could have imagined,” says Frédéric Cho, a them to store the huge piles of cash, according to media reports. strategic advisor.

In the first nine months of 2014, China’s top procuratorate “Former president Jiang Zemin once said that corruption is charged 35,633 officials with bribery. Some 80 per cent of cases the biggest threat to the Communist Party’s continued survival. involve bribes of more than 50,000 yuan or embezzlement of The current campaign has become such a over 100,000 yuan. top priority that it may explain why other The procuratorate has also tracked reforms, such as the Shanghai FTZ, have down 502 corrupt officials that have fled been held up. It is also no coincidence abroad. Furthermore, there has been a wave that the Fourth Plenum [of the Chinese of suicides among highly ranked officials The number of Chinese officials Communist Party’s 18th Congress] chose who may have suspected they stood next charged with bribery from January to rule of law as a theme at its meeting in in line to be investigated.

September 2014.

November,” he adds.

“If you want to clean a staircase President Xi Jinping’s anti-corruption drive thoroughly, you’d better start from the top,” says Ulf Ohrling, a lawyer started almost immediately after his appointment as Communist and chairman of the Swedish Chamber of Commerce in Hong Kong.

Party chief in November 2012. He pledged to net both “tigers and “The best way to combat corruption is to increase flies” referring to cadres both from the top to bottom ranks. transparency. Studies show that the countries with the greatest Many highly ranked officials have been detained, ensnared in transparency and free media, such as the Nordic countries and the current crackdown, among them: New Zealand, also have the lowest corruption. Unfortunately, • Zhou Yongkang, the powerful former state internal security transparency in China has decreased lately – for example, it’s no chief, a hardliner who backed the disgraced Bo Xilai and under longer possible to access the land registry’s information about whom the domestic-security budget grew bigger than the real-estate ownership,” says Ohrling. defence budget before he retired in 2012.

• Xu Caihou, a general who served as vice-chairman of the If Wei, a middle-level deputy director of the NDRC’s coal Central Military Commission. department, can enrich himself with 200 million yuan in bribes, • Li Chuncheng, one of two deputy party secretaries of Sichuan. one can easily start to wonder how much dirty money his more Li was the first of at least 18 Sichuan-based politicians and powerful superiors are able to collect. business executives tied to Zhou who have been detained, If his campaign continues at the ousted or probed. same pace, president Xi may soon • Jiang Jiemin, the former chairman of China National Petroleum, realise that what has been achieved who had been promoted to head a commission overseeing stateis just the tip of the iceberg. The owned companies. At least 13 oil-related executives have either question is, what happens then? been punished or are under investigation.

35,633

more integrated in all aspects of the global economy which makes it more difficult to carry out isolated reform experiments by copying a model that worked 30 years ago.”

The Shanghai FTZ was supposed to be a centre for experimentation with a reduction or the elimination of restrictions on foreign investment in China. All activities that were not mentioned in a so-called “negative list” of restrictions and prohibitions should be fully open to foreign investment.

However, the first negative list was a disappointment to many foreign investors, since it included virtually all of the restrictions and prohibitions on foreign investment set out in the government’s regular guidelines for foreign investors.

“We analysed the Shanghai FTZ for a handful of clients that were considering establishing themselves there but in all cases we came to the conclusion that there were no real reasons for them to do it,” says Ulf Ohrling, partner at Mannheimer Swartling law firm and chairman of the Swedish Chamber of Commerce in Hong Kong.

“If they don’t need to be close to ports or airports or to make use of a free port status, there are, nowadays, so many other viable alternatives for locating a company in and around Shanghai,” he adds.

So far, some 12,600 companies have registered in the Shanghai FTZ, but only 14 per cent of them are foreign firms. Analysts believe that the major reasons many Chinese firms have registered are either simply to show support for the local government or that they use

12 DRAGONNEWS • NO.04/2014

The expectation from Chinese politicians and authorities is that the Shanghai FTZ must be a success.

the zone to speculate in real estate, anticipating that there will be a future property boom.

One of the foreign-owned companies in the zone is Swedenbased SKF Group, a leading global supplier of products, solutions and services within rolling bearings, seals, mechatronics, services and lubrication systems. In June 2014, it opened the SKF Northeast Asia Distribution Centre in the zone, integrating trade, logistics and account settlement.

In 2014, some restrictions were removed from the negative list and it is now possible for foreign companies to invest in a number of new businesses, ranging from Chinese green tea to civil airplane engines, and to use the FTZ as an export-processing zone.

The best way to combat corruption is to increase transparency.”

Ulf Ohrling, Mannheimer Swartling

It is also possible for foreign-owned banks to establish themselves in the zone, as well as for companies in health insurance, healthcare,

DRAGONNEWS • NO.04/2014 13

We came to the conclusion that it would be too early for us to establish a branch in the zone.”

Mikael Westerback, Handelsbanken

shipping, telecommunications, education, travel agencies and human resources.

In July, the South China Morning Post reported that 10 foreign banks had set up subsidiaries in the FTZ but none of them had received the key permits that would allow them to take advantage of the liberalisation offered.

The Swedish bank SEB has not established itself in the FTZ and Hähnel does not see any need today, since the bank can help its clients in the zone from its existing Shanghai branch.

“However, if we could get access to international capital markets for funding and could use that in China, then we might reconsider. Getting access to China’s capital market for investment banking and wealth management products could also be interesting but that we already have through our Hong Kong branch actually,” he says.

Handelsbanken’s head of Greater China, Mikael Westerback, is of the same opinion: “We made a study and came to the conclusion that it would be too early for us to establish a branch in the zone. We are guided by our clients’ requests and, today, there is no real demand from them that we should be there,” he says.

becomes their chance to act outside the normal framework and they can afford to think outside the box,” says Hähnel.

“The most important thing about the FTZ is that it becomes a catalyst, or a spark, for national reforms, rather than becoming a substitute for reforms,” he adds.

Hähnel does not agree with the idea that nothing has happened during the FTZ’s first year. “Within the financial industry, important things have actually happened. So called cross-border cash pooling, which is used to transfer money in and out of China freely, is now allowed within the zone, and that is an important issue for many companies. But it is correct that investment banking is not yet allowed and there is no access to the capital markets,” he says.

“The idea of the Shanghai Free Trade Zone is very hopeful, but in China there is always a certain distance from words to action,” says Frédéric Cho, a former executive advisor at Handelsbanken Capital Markets who has lived for 18 years in cities such as Beijing, Shanghai, Wuxi, Taipei and Hong Kong. Since May 2014, Cho has been running his own strategic consultancy, advising clients on investments in Asia and the Nordic countries.

“But I’m convinced that there’s a strong Even if the FTZ hasn’t lived up to the will in the government, not least of Premier Li expectations after the much hyped launch a The number of companies that have Keqiang, to carry out this experiment and open bit more than a year ago, it is still too early registered in the Shanghai FTZ – just 14 new similar zones in more cities,” he adds. to count it out. per cent of them foreign-invested firms.

China’s central bank governor Zhou “The expectations were high that the Xiaochuan has said that China is likely FTZ would lead to big changes quickly to have fully liberalised interest rates within two years, but the and that hasn’t happened. However, we have seen several smaller timetable will depend on economic circumstances at home and changes in this reform package. It has been easier to set up a abroad. This process of deregulation will reportedly start in the company within the zone and the administrative regulations within, Shanghai FTZ. for example, logistics have been simplified,” says Westerback.

As general manager of SEB’s Shanghai branch – the seventh largest of around 60 foreign bank branches in Shanghai and one On the first anniversary of the FTZ, Premier Li announced that an international gold trading platform would be established of the fastest growing – Hähnel finds himself in a position where in the Shanghai FTZ, which was the first concrete liberalisation he regularly meets with highly ranked Chinese officials and

by China’s financial authorities since the inauguration of the zone. representatives from China’s central bank (the People’s Bank of There are plans that other commodities trading platforms will follow.

China) and the financial supervisory authority (China Banking “China is both a major producer and consumer of Regulatory Commission). commodities and should have great potential for developing these “Very often, when they discuss the Shanghai FTZ, my impression types of platforms,” says Westerback. is that they see no way back,” says Hähnel, who is also vice chairman Another initiative is the Shanghai-Hong Kong Stock of the European chambers’ banking group. “The expectation of Connect, which is a pilot programme that links the stock markets politicians and authorities is that the FTZ must be a success. in Shanghai and Hong Kong and allows cross trading. Under the “Officials in Shanghai are frustrated because they cannot carry programme – also called the “through-train scheme” – investors out necessary reforms faster to make Shanghai a modern financial in Hong Kong and mainland China are able to trade and settle centre. They want to speed up the reforms of capital markets and shares listed on the other market via the exchange and clearing make the Chinese currency more convertible, but decisions about house in their home market. reforms of this kind are taken in Beijing. The Shanghai FTZ

12,600

14 DRAGONNEWS • NO.04/2014

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.

STOCKHOLM

GOTHENBURG

MALMO

HELSINGBORG

BRUSSELS

HONG KONG

SHANGHAI

My opinion is that we will see significant reform proposals regarding SOEs in the first half of 2015.”

Christer Ljungwall, Swedish Agency for Growth Policy Analysis

The programme was much delayed which was regarded as a way for the Beijing government to signal its displeasure at developments in Hong Kong and, significantly, in early November – after more than a month of the Occupy movement in Hong Kong – Xi Jinping gave the visiting Hong Kong leader Leung Chun-ying a go-ahead for the scheme, perhaps as a gift for staying loyal through this turbulent time of Hong Kong.

Initially, the Shanghai FTZ was described as a threat to Hong Kong as a major financial centre.

“But the real worry is probably not so much that Shanghai will become the new Hong Kong; it’s more the opposite – that Hong Kong could become more like Shanghai,” says Ohrling.

At the end of September, tens of thousands of students, and later other groups loosely affiliated with an organisation called Occupy Central, launched a protest against Hong Kong’s government, occupying certain streets in central Hong Kong. The protesters demanded real democracy and free elections in 2017, when Hong Kong’s new leader will be selected, and they also called on the current chief executive, Leung Chun-ying, to resign.

This, mostly peaceful, but illegal, mass movement went on week after week, leading to a polarisation between the protesters and various proestablishment groups in the city.

But it is not only the students that have protested against what they see as the central government’s strong influence on Hong Kong’s future.

In July, some 850 lawyers took to the streets in protest against a white paper by China’s State Council that declared that patriotism, or “loving the country”, was a basic political requirement for all Hong Kong administrators, including judges and judicial personnel.

The city’s large legal and financial industries have thrived in part because of the consistency and predictability of the legal system, which lawyers now perceive to be under threat.

“Hong Kong has an exceptional position with its rule of law.

To ensure rule of law you need to have an independent judiciary and to also include human rights principles. This is not the case in mainland China. Even though ‘rule of law’ was a theme for the recently held Fourth Plenum, they regard it very differently and probably mean law and order and are aiming at creating more

16 DRAGONNEWS • NO.04/2014

efficiency in the application of the law,” says Ohrling, who has worked as a Swedish lawyer in China for more than a decade.

Making the Chinese currency fully convertible and implementing interest-rate reforms have been two important long-term goals of the Shanghai FTZ concept. Nevertheless, convertibility itself is not the key issue, some argue.

“China’s currency is already convertible outside China through the offshore CNH market,” says Hähnel. “The big reform will be when the RMB is convertible under the capital account between onshore and offshore; that is between inside and outside China.

“You cannot make a currency fully convertible unless there is a big and well-functioning capital market, which will still take a long time, many years. China’s bond market will be many times bigger than it is today. Corporations will increasingly use the bond market for financing and local governments will redirect their funding from the bank sector to the capital market,” For more than two months, some central areas of he says.

Hong Kong have been “If the RMB would occupied by protesters. become fully convertible in the zone, with free interest rate-setting, then we would have a situation similar to the one in Hong Kong today, with a limitation on capital movements to the rest of China. So the big reform will be when the regulations that are in place in the Shanghai FTZ also apply to other parts of China,” says Westerback.

China has, however, already given several positive signals on the issue of carrying out the major reforms needed to continue to move forward.

In November 2013, the Third Plenum of the Chinese Communist Party’s 18th Congress, under an ambitious agenda, concluded that market forces should play a decisive role in the future economy. Other decisions included major initiatives such as a relaxation of the one-child policy, the elimination of the repressive “re-education through labour” camps, and a host of reforms to the taxation and state-owned enterprise (SOE) systems.

“One year later, China has delivered more than they promised at the Third Plenum,“ says Cho. “It’s been suggested that, from 2016, parents will be allowed to have two children. The leaders have found ways to increase the flows of capital to and from

The real worry is probably not so much about whether Shanghai will become the new Hong Kong; it’s more the opposite.”

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China and they have started to privatise, or partly privatise, SOEs. Corporations such as Sinopec and State Grid have brought in private owners in some of their subsidiaries,” he says.

“If these changes mean that SOE privileges and benefits are going to be gradually removed, it’s a very positive signal since China needs to provide a more level playing field. This will serve both Chinese domestic private enterprises as well as foreign invested companies,” says Ohrling.

Hähnel is convinced that there is more to come, and argues that such change is urgent: “Capital allocation is a term to measure how much economic growth is created by banks lending. Before the global financial crisis in 2008-2009, one RMB in lending gave one RMB in growth, but now you need five RMB in lending to generate one RMB in growth. Consequently, the capital allocation has become substantially less efficient. One reason is that much of the banks lending still is directed to SOEs and non-profitable local investment projects. This is something the government wants to change,” says Hähnel.

Ljungwall at the Swedish Agency for Growth Policy Analysis regards it as positive that the Chinese leaders have started to deal with corporate governance issues for the SOEs. “What we’re seeing now are reforms that aim to fine tune SOEs that are regarded as core enterprises in the economy. SOEs that don’t qualify will be privatised. For SOEs that do qualify, the government will take measures to increase productivity and efficiency, carrying out reforms that separate ownership from dayto-day decision-making. My opinion is that we will see significant reform proposals regarding SOEs in the first half of 2015,” says Ljungwall.

Meanwhile, Chinese industry faces huge domestic issues.

Due to the three-decade long one-child policy, the workforce is both ageing and shrinking. At the same time, wages are increasing, making Chinese enterprises less competitive. Many multinational companies have already moved out of China and found less expensive suppliers in Bangladesh and Vietnam.

China’s focus on economic growth has led to overcapacity in almost every sector and average productivity is very low. A consolidation reform which means merging companies and shutting down unprofitable businesses is necessary.

“In 2008, when China injected four trillion yuan into its stimulus package to cope with the global financial crisis, much of the money went into the wrong pockets. SOEs that had started to

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When China injected four trillion yuan into its stimulus package in 2008 to cope with the global financial crisis, much of the money went into the wrong pockets.”

Frédéric Cho, strategic advisor

scale down suddenly became more powerful. Too much money was invested in property and projects without any financial capacity,” says Cho. “SOEs need to be exposed to competition in a much more direct way than today,” says Ohrling. ‘SOEs benefit through barriers to trade and a large number of hidden subsidies, such as cheap land, electricity and water and beneficial loans.”

China’s state-owned banks tend to prefer to lend to SOEs, rather than funding millions of job-creating private companies.

As a consequence, many private entrepreneurs have to rely on unofficial moneylenders for their financing.

China’s so-called shadow banking sector has become the world’s third largest after the US and the UK, according to a report by the mainland’s Financial Stability Board. The board estimated that the “grey” market outside the regular banking system amounted to US$2.7 trillion at the end of 2013.

Corruption is also widespread in the SOEs as the current anti-corruption crackdown, initiated by Xi Jinping, has shown.

Even the Shanghai FTZ’s top official, Dai Haibo, has been detained for suspected graft.

The anti-corruption campaign raises the question as to whether the top officials that have been netted are merely scraps on the surface – or whether they are part of a more substantive and deeper problem (see separate article).

In his first weeks of power, Xi Jinping launched a new doctrine called “China’s dream”, evoking its American equivalent and harking to a “great revival of the Chinese nation”.

However, the question still remains if his dream can be fulfilled and if the Xi-Li government will have the political muscle to push necessary reforms past entrenched resistance by the SOEs, tycoons, local government officials and other interest groups whose comfortable positions would be threatened by change. b

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

Expecting solid growth in China Growing incomes among Chinese consumers combined with an ageing population and the potential lifting of the one-child policy are all positive factors in SCA’s plan to expand in the Chinese hygiene products market, according to SCA’s Asia-Pacific head Ulf Söderström.

A

quick look at some statistics stock market when I joined, then Volvo stepped shows why SCA’s Asia-Pacific in as a part owner, and later the company got president Ulf Söderström can Volkswagen as new owner. Boliden was in allow himself to be optimistic bad shape when I joined and went through a about the future of the company he is heading. total ‘renovation’ and is today a well-managed “China is the second largest tissue market company. SCA had started a journey away in the world. However, the annual consumption from paper and packaging into becoming a of tissue per capita in China is only 3.5 kg, leading hygiene products company within the compared to 15 kg in Western Europe and 22 fast-moving consumer goods segment.” kg in North America, so there is enormous potential in the Chinese market,” says In China, SCA has joined forces with Vinda, Söderström, who adds: “The industry in China the second largest tissue producer in China is also not yet consolidated, and the four leading with 8,000 employees, nine factories and over players have only 35-40 per cent of the market 300,000 points of sales countrywide. SCA is compared to 70-80 per cent in the West.” the majority shareholder of the Chinese listed Söderström joined SCA, a global hygiene company and has incorporated its China and forest products company, in 2009 as hygiene business into Vinda. Leading tissue senior vice president for business strategy and brands in China consist of Vinda toilet tissue, development. Two years later, he moved to kitchen rolls, facial tissues and handkerchiefs, Shanghai, where he is responsible for Asian Tempo pocket and box handkerchiefs and markets east of India.

Tork away-from-home professional hygiene He has settled in the city solutions. In the personal care together with his wife Karin, sector, SCA’s global brands who works as a volunteer for a in China include TENA charity organisation, Stepping incontinence care products, Stones, teaching English Libero baby diapers and The annual consumption to migrant children. Their Libresse feminine care. of tissues per capita in children, Tom and Lisa, have Söderström believes that China – an amount that is finished school and have both Vinda, which was founded considerably lower than in moved to London. Söderström in Jiangmen City in Guangthe western world. is also active in the Swedish dong Province, and SCA are a Chamber of Commerce, where perfect fit. he is chairman of the Shanghai Chapter.

“Vinda has a large distribution network, efficient manufacturing and knowledge about China. SCA has the innovation skills and Söderström, who turns 50 in December, grew up in Stockholm, where he studied knows how to build premium brands,” he says. economics and took a Master of Business Vinda is an established tissue brand in Administration at the Stockholm School of China and Tempo handkerchiefs have a 70 Economics. His background includes positions per cent market share in Hong Kong, but as communications and investor relations SCA’s other brands have so far a relatively (IR) manager, first at a Swedish-American oil small market share in China. Söderström is and gas company called Forcenergy, where confident that Vinda’s robust distribution he worked for 10 years. Between 1997 and channels will help to increase the presence of 2001, he undertook a similar role at Scania, SCA products on shelves in Chinese stores. working at the global bus- and truck-maker’s “SCA’s experience is that you need to headquarters in Sweden. be No 1 or No 2 in a market to gain good Before joining SCA, he also spent eight profitability. We believe we have a good years at the Swedish metals company Boliden, chance of achieving that in China within where he moved from being responsible for multiple categories and target segments in the communications and IR to becoming the head Chinese hygiene market,” he says. of the company’s global sales organisation.

“The common denominator in my last Analysts expect that 60 per cent of the three companies is that they were all going growth in the global hygiene products market through the process of big changes,” says will come from Asia and 80 per cent of that Söderström. “Scania had just been listed on the growth will come from China.

3.5 kg

SCA’s experience is that you need to be No 1 or No 2 in a market to gain good profitability.”

22 DRAGONNEWS • NO.04/2014

With growing incomes, Chinese consumers will look for more premium tissue and personal care products. An ageing population will also increase demand for incontinence products. Furthermore, the current softening and potential lifting of the one-child policy in China could mean a strong birth rate increase and, as a consequence, increase the sales of baby diapers. b No ordinary women To strengthen awareness of the SCA corporate brand, in connection with its numerous customer and consumer brands, SCA chose to participate with a female squad in sailing’s toughest event, the Volvo Ocean Race. The race got underway in Alicante, Spain, on 11 October, and finishes in Gothenburg, Sweden, in June 2015. It is the race’s first female team entry in 12 years.

Ulf Söderström explains the company’s decision to compete with a female team: “About 80 per cent of those who buy our products are women and they are also leading consumers of hygiene products. They make the decisions about what brand to buy and they educate the children in hygiene issues. So women are extremely important for SCA.” The 13 women in the crew – 11 on the boat and two in back-up – were selected from 250 applicants and have been training and preparing for two years’ time. On average, they have added 15 kg of muscles to get ready for this tough nine-month, round-the-world offshore marathon.

Team SCA and the other six entries in the race will make a port call at Sanya, Hainan Island, at the end of January. You can follow the team at www.teamsca.com and, in Chinese, www.weibo.com/scachina.

DRAGONNEWS • NO.04/2014 23

Delivering Value for Scandinavian Companies Across Asia

Baking from the heart Beijing-based entrepreneur Ida Collins designs her cakes and cupcakes as a way of self-expression. She hopes to develop her home-based Fat Bunny Bakery into a baking powerhouse.

Text: Malin Teeling, malin@swedishchamber.com.cn

In

Beijing, the Swedish word fika (coffee break) has been taken to a higher level thanks to the Swedish entrepreneur, designer and baker Ida Collins. In 2012, she started her home-based bakery as a hobby on the side. It has now grown into Fat Bunny Bakery, a full time baking studio with orders coming in on a daily basis.

Her cakes have even been transported to other cities in China by train and two cakes have been sent by air to the famous CanadianChinese-Vietnamese actress and restaurateur Christy Chung, currently residing in Shanghai, who is also a frequent customer of the bakery whenever she is visiting Beijing.

Recently, Fat Bunny Bakery has also been getting a lot of media attention and recognition for its innovative take on edible art. The bakery has received the Beijinger Award for Best Custom Cakes, The 24 DRAGONNEWS • NO.04/2014

Putting your heart and soul into a cake is really what makes the difference from other bakeries that have adjusted to mass production.�

Procurement & Supply Chain Management Organizational Improvement Growth & Expansion

In 2008, Collins came to China as an exchange student from the University of Lund and found herself overwhelmed with excitement living in the concrete jungle of Beijing. The exchange semester extended into a year.

After only a few months back in the hometown of Nynäshamn in Sweden, Collins felt a strong urge to return to Beijing and decided to move to China on a tourist visa.

She spent the first month living at a hostel and it wasn’t until she got a job as an English teacher that the managed to move into a more homely environment, still sharing the apartment with other young dreamers.

Baking was a favourite pastime and a form of therapy to Collins, making it possible to spend countless hours working on the design of her cakes and cupcakes as a way of self-expression. Truth told, Collins herself does not eat cake at all; it is rather the process of making cake that really interests her. Of course, she nibbles at her experiments with innovative ideas, but when it comes to treating herself, she would much rather skip dessert and order a beer.

Anything less than the best just won’t do.

Wow Factor award from Time Out Beijing as well as being mentioned in both Beijingkids Magazine and City Weekend.

Collins has been baking cakes, cupcakes, buns and cookies for as long as she can remember. She explains that her mother and grandmother are partly responsible and she associates them with her earliest memories of baking.

When she was just a girl she would sometimes pretend to be sick so that she could stay at home to bake and experiment with different techniques and flavours.

Today, she can create a sponge base in her sleep, but what really gives her a sugar rush is creativity and being able to integrate art into otherwise fairly standard food.

“When you share a cake, it is usually for a special occasion and a time for celebration.

This should be reflected in everything at the event – food is not an exception,” she says.

26 DRAGONNEWS • NO.04/2014

Today, Collins lives together with her husband and runs the Fat Bunny Bakery from their small and traditional Chinesestyle kitchen, where everything is made from scratch and tailored to the specific needs of the customer. Those include “grown-up” flavours, such as rich and dark chocolate, salted caramel, and even a Guinness-glazed sponge cake.

For children, gentler flavours are recommended and the overall appearance is the main challenge. The most popular birthday cakes feature Frozen, Angry Birds and Lego themes.

Over the holiday season, Collins strongly recommends her luscious gingerbread cake with cranberry filling perfectly complemented by a maplecinnamon butter cream.

When it comes to larger orders, Collins

sometimes spends up to five hours just kneading the marshmallow fondant to perfection, which on one occasion resulted in a sprained wrist.

“Putting your heart and soul into a cake is really what makes the difference from other bakeries that have adjusted to mass production,” she says.

She is a perfectionist. If she can’t truly pinpoint precisely what a customer wants, she will turn down the cake order.

Her customers are mainly westerners but Chinese are also finding her mouth-watering masterpieces a must-have for themed parties.

Typical Chinese desserts are less sweet than their western counterparts, which is a challenge for Collins. Making desserts the traditional Chinese way with a green tea flavour and red beans is not ideal because it is not a flavour that she is familiar with, making it impossible to say if she has nailed it or not.

The bakery is her life project, so she needs to be able to take pride in everything that she makes. “Anything less than the best just won’t do, and I still haven’t had one single complaint or a disappointed customer,” she says knocking on the wooden table.

A huge challenge of baking in Beijing is the availability of ingredients. “Essentials such as flour and dairy products that are of the same flavour and quality standards I’m used to working with are very difficult to locate in Chinese markets,” she says.

As a costly result, Collins has been forced to buy most of her inventory from April Gourmet, a grocery store in Beijing. Her small kitchen cannot hold more than a few days inventory, which also throws buying in bulk out the window. On the plus side, this ensures that the ingredients are always fresh but at a cost. Collins dreams of a bigger and more functional kitchen, where she hopes to further develop this home-based bakery into a baking powerhouse, still holding on to her value of baking from the heart. b

Ida’s baking tips To those of you struggling to find buttermilk in China, make your own! Add a tablespoon of lemon juice or white vinegar to 200 millilitres of full-fat milk. Mix and let it sit for a few minutes before adding to the cake batter. Not only is this super easy, it will also taste so much better!

Buy a scale to measure your ingredients. Unlike cooking, which allows you to estimate and improvise, baking is an art of precision. Once you find the perfect recipe for sponges/ fillings/butter creams/toppings, make sure you write down the exact measurements.

If you want to know more about Ida Collins and the Fat Bunny Bakery, or if you need some inspiration in your own kitchen, visit her website (www.fatbunnybakery.com), Facebook and Instagram.

The leader

Leadership by love

We used to fly airplanes, now we have to learn how to fly people.”

As head of SAS, Jan Carlzon pioneered leadership by focusing on people, not aircraft. His book Moments of Truth has been inspiring leaders the world over three decades.

Carlzon together with the Swedish boxing champion Ingemar Johansson.

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

In

June 2014, when the Swedish leadership magazine Chef ranked the most important moments in Swedish management history, the publication of Jan Carlzon’s Moments of Truth (Riv pyramiderna in Swedish) in 1985 took the undisputed No 1 spot.

The book, which has been published in 22 countries, has inspired leaders worldwide for three decades, and even though the first edition was published 29 years ago, Carlzon still collects substantial royalties every year.

Jan Carlzon outside SAS’ former head office in Solna where he worked until 1993.

In 1981, Carlzon became chief executive officer (CEO) of Scandinavian Airlines System (SAS) after having successfully turned around a Swedish tour operator, Vingresor, and a domestic airline, Linjeflyg.

At that time, SAS was facing financial difficulties and was ranked as one of Europe’s worst airlines when it came to on-time arrivals and departures.

Carlzon quickly managed to turn SAS into a successful airline through customer-driven strategic leadership. In the years ahead, SAS was elected the world’s best airline on several occasions, while also becoming a global leader in terms of profitability and punctuality.

“One of the first things I said to the staff was, ‘We used to fly airplanes, now we have to learn how to fly people,’” Carlzon recalled when he visited Hong Kong in October for a breakfast seminar arranged by the Swedish Chamber of Commerce.

What Carlzon promoted through his leadership and his book has been described as a paradigm shift in terms of how to lead people and focus on the customer.

“To run a business or an organisation, the primary assignment must always be to maximise the customer benefit,” he says.

Jan Carlzon is signing books after his seminar in Hong Kong.

28 DRAGONNEWS • NO.04/2014

SAS celebrates being awarded Airline of the Year in 1983.

22

“Norwegian has been successful on shorter When he arrived at SAS, Carlzon realised that fullpaying passengers were put together in the cabin with flights but could face problems since they introduced everyone who had bought heavily discounted tickets. intercontinental flights, which is a totally different So he dropped First Class on all European routes and business,” he says. instead introduced EuroClass for those who had paid fullThe number of fare economy prices. These passengers received separate After heading SAS for a record 12 years, Carlzon countries in which counters and lounge access, more legroom, free drinks and resigned in 1993. Since then, he has worked as an “angel Jan Carlzon’s book upgraded meals. SAS became “the businessman’s airline”. investor”, helping small- and medium-sized companies to Moments of Truth “We didn’t introduce business class as many still turn their businesses around. has been published. believe today. What we did was to raise the quality of “Together with the former chief financial officer at service in economy class without raising the ticket price SAS, Anders Claesson, in 1995, I assisted the private and then we divided economy class in two sections,” says Carlzon. equity companies Nordic Capital and KF Invest to acquire the tour “This wasn’t, however, popular among our competitors and, for operator Fritidsresor and the airline Transwede. We restructured the example, Air France blocked airports in France so we couldn’t land. businesses and were able to sell them two years later for 10 times more That was fantastically good PR for us ...” than the acquisition price. It was one of the best deals that Nordic Carlzon also introduced special seminars, dubbed “charm Capital ever had done,” says Carlzon. schools”, for the airline’s 11,000 employees, with the aim of improving He also joined a private-equity company called Ledstiernan, customer service. which invested in a large number of mainly smaller information It was a leadership style that was highly appreciated by most technology (IT) companies. However, shortly after the company had employees. “All of us are controlled by love and fear. Some people think listed on the stock market, the IT bubble burst. that if people get afraid they will perform better. I know it’s wrong.

“It was like having bought a big box of poor vintage wine. You You need to show people respect, trust and love – that’s the only way to have to keep it for many, many years before it matures,” says Carlzon. achieve long-term development and profitability. Leadership by love is He is the chairman of Mentor, a non-government organisation to make people do something they are proud of,” he says. founded by Sweden’s Queen Silvia in 1994 that focuses on drug-abuse prevention and helps young people improve their lives.

At the age of 73, Carlzon is still a sought-after speaker – and is In the 1980s and early 1990s, the airline market was still regulated.

Carlzon could foresee that there would be a number of mergers and happy to accept the invitations. “I know I have a message that is both acquisitions. His mission was to make SAS – at that time the fourth good and important. I understand that it is still very relevant today to largest airline in Europe after Lufthansa, British Airways and Air talk about the shift from an industrial society in which machines were France – “one of five in 1995”. A merger between SAS, KLM, Swissair the focus to a service society in which people are the focus,” he says. b and Austrian Airlines was very close to becoming a done deal but finally unravelled in 1993.

Jan Carlzon on …

“Swissair went bankrupt, Austrian was bought by Lufthansa and KLM was taken over by Air France. SAS is actually, together with Finnair, one of the few airlines that have survived,” says Carlzon. … SAS today: “[CEO] Rickard Gustafson does a good job, but SAS In 1997, when SAS entered an alliance with Lufthansa, four years probably has to focus on what segment they should be in. It is a after Carlzon and SAS had parted ways, the EuroClass concept was difficult situation. To focus only on the low-end market would be scrapped and business class introduced. a big step for SAS, but if they go for the high-end segment there’s “That was a big mistake; they created a product that very no certainty that the market is there for them.” few could use,” says Carlzon. “We introduced EuroClass since … general cost-cuts: “It’s something a company should avoid Scandinavian businessmen and women are normally not allowed because you cut both the profitable and the non-profitable areas.” by their employers to fly business class in Europe – only on ... the rapid development of China: “By being centralised and intercontinental flights.” regulated, China has embraced communist capitalism. But they Today, the market is deregulated and competition is strong, with will come to a point when capitalism tends to take over. Then many low-cost carriers pressing prices. Carlzon believes that the it will be dangerous, look at Russia where all the capital assets budget pioneer Ryanair can be one of the survivors because “they were taken over by a small minority.” speak the low-cost, low-price language” throughout all their offerings.

DRAGONNEWS • NO.04/2014 29

Hong Kong Hong Kong a fast growing market for Uber n On 19 November, Sam Gellman, head of Asia expansion at Uber, held a much appreciated presentation at a SwedCham Hong Kong After Work seminar. Since 2009, the San Francisco-based ride-sharing company has expanded to more than 100 cities worldwide and is currently valued at more than US$17 billion.

What made the seminar especially interesting was the fact that Hong Kong has become the fastest growing market for Uber outside of the US within just a few months of launching in the territory. Gellman stressed that even though the public transportation in Hong Kong is great, and there are plenty of taxis on the streets, there is still an unmet demand for transportation – we have all seen the long taxi lines on Friday nights.

Three main success factors emphasised during the seminar included • Flexibility - Adjusting rates in real time based on, for instance, weather conditions and peak hours.

• Safety – Passenger ratings keep track of the Uber drivers’ performance. Future passengers will see the overall rating, and if it gets too low, the driver will be excluded from the system.

• Convenience – Having the credit card registered to your Uber account means there is no need to deal with cash or cards to pay for the ride. Simply step out of the car and go on with your day.

Sam Gellman of Uber has seen Hong Kong becoming the fastest growing market outside the US.

Congratulations K-FAB Scandinavia!

Cleaning the “adopted” Big Wave Bay beach

n K-FAB Scandinavia, a SwedCham HK member company, exhibited at the Jinhan Fair in China for the first time this year. The company focuses specifically on selling Scandinavian style and design, and its exhibition was a great success.

K-FAB Scandinavia won the award for best booth display. Congratulations from SwedCham HK! The booth was developed specifically for this exhibition and was designed by Felix Lin and Eacher Li from Hakuna Matata Design för alla AB.

n On 16 November, SwedCham performed a site action at its very “own” beach in Big Wave Bay, near Shek O on Hong Kong Island. Within the framework of the WWF for Nature’s Coastal Watch programme, SwedCham has “adopted” Big Wave Bay until 2016.

The Coastal Watch programme, which brings volunteers from local organisations and businesses together with scientists and activists, aims to use scientifically sound methodologies to study, protect and provide year-round monitoring for ecologically valuable habitats in Hong Kong.

Said SwedCham Coastal Watch coordinator Kristian Odebjer: “We are very happy to partner with an organisation like the WWF as we strengthen SwedCham´s commitment to Hong Kong´s unique natural environment.”

Tommy Granström, CEO of K-FAB Scandinavia, among the exhibited lamps.

30 DRAGONNEWS • NO.04/2014

Beijing The path to the top

Karlis Smits believes that the government’s new strategies can mean long-term prosperity for China.

The case for quality n At a seminar in Beijing, the World Bank’s senior economist Karlis Smits analysed China’s way forward following the Third Plenum of the 18th Congress of the Chinese Communist Party in 2013, which saw the announcement of 115 new reforms aimed at promoting economic growth.

“With the current economic slowdown from previous growth plans, the government has recognised the advantage of shifting towards quality instead of quantity growth, which means a shift to a more efficient and inclusive growth. This kind of growth will allow for job creation, with a deepening division of labour and higher living standards which in turn will broaden the middle class and further support consumption growth,” Smits said.

Environmentally sustainable growth will be achieved through transitioning from industrial focused sectors to service sectors. The prosperity of a whole new sector in services will create highly skilled jobs and further open up for new potential high value added industries and services.

“The aim of the new strategy,” he said, “is to inflict thinking and innovating independently, which will result in the Chinese demanding better lifestyles as well as amenities. The shift is also set to shrink the environmental setbacks in consequence from past growth strategies.”

This period of transission will also inflict a time of instability within some sectors. “For example,” Smits said, “the Chinese residential real estate market is currently undergoing a turbulent era. In 2013, Chinese property prices were increasing significantly compared to the global average, which was supported by the Chinese credit growth. This triggered property development throughout the nation to such an extent that eventually the growth led to a mismatch in supply/demand causing a shortage of affordable units in highly dense areas while oversupplying in areas with low population growth. A further weakening in the residential real estate could significantly reduce economic activity and a sharp slowdown in other investments.”

Both President Xi and Premier Li are keen to promote growth, as it supports employment and social stability and in turn encourages an environment to nurture structural reforms and changing Chinas growth model. “A faultless implementation of the new strategies can mean long-term prosperity to China, yet the downsize risk remains,” was Smits’ conclusion.

32 DRAGONNEWS • NO.04/2014

n Jan Boström, founder of Gaia Leadership, conducted a workshop called “The Path to the Top” on 20 October in which he presented some advice on how to become successful in western companies in China.

“Be close to the headquarters, take on international assignments, responsibilities and projects, and put together a challenging yet realistic strategic plan,” he said. “If you don’t know where you are going, how will you know when you have arrived?”

“In many cases you will have multiple ‘tops’. Most likely you will already have experienced a couple of tops in your life. This means that by the time you have reached one top, you will have gained enough altitude to see another one that was not visible to you before,” he said.

Gaia Leadership’s Jan Boström (middle) is happy to help people to make a career.

The Great Firewall of China n On October 21, the consultant and organisation builder Jørn Knutsen, who has spent the last 14 years in China, held a seminar about the internet challenges in China that are caused by the Chinese authorities’ wish to limit non-approved information from the outside world into China.

“Just as the Ming Dynasty built a gigantic wall to protect their empire, the government has now made an even stronger Great Firewall of China. The aim with this is to uphold the constitution and the laws of China,” said Knutsen.

“It’s not strange that a country wants to prevent the direct distribution of illegal content to its citizens. China, like many other countries, including Sweden, actively blocks illegal activity on the internet such as child pornography, weapons trading and the drug business to protect its citizens.

This kind of information may not pass through the Great Firewall of China, which is understandable. But China goes beyond that to block any/all activity that could potentially pose as a threat to the country.”

With 1.4 billion inhabitants – 800 million of them internet users – China maintains that the internet needs to be monitored in order to be one unified country.

“Having a VPN is not illegal and many companies use them to communicate securely with their home offices,” said Knutsen. “However, using a VPN to spread undesirable information within China is illegal. It is important to maintain a neutral online opinion of China. Of course, online dissent exists but it is largely controlled, and even though the dissent may target corruption at local levels, it does not attack the top leadership of China.”

Knutsen concluded, “We can expect the internet in general to become more expensive to use as well as more closely supervised in Jørn Knutsen says that most countries the future.” block illegal activities on the internet.

11 women, 1 dream SCA supports the only all-female crew, Team SCA, in the world’s toughest offshore race – the Volvo Ocean Race.

We want to inspire people to live their lives to the fullest and to follow their dreams.

Follow the team, follow the dream, on www.teamsca.com

@ 爱生雅中国

SCA is a leading global hygiene and forest products company with brands such as TENA, Tork, Libero, Libresse, Tempo and Vinda.

Shanghai Business and human rights in theory and action n Internationally renowned experts discussed good practices and challenges regarding a human rights agenda using the United Nations Guiding Principles as framework at a workshop on 30 October at the Four Seasons Hotel in Shanghai.

The experts represented the Global Business Initiative on Human Rights, the Institute for Human Rights and Business, Tracktwo – a consulting firm specialised in responsible business and sustainable development – and the Swedish government.

The workshop served as an opportunity for business executives to exchange practices, challenges and plans regarding sustainable business and social impacts with experts in this field.

From left: Wesley Chiu (SCA), Veronique Rochet (H&M), Helene Loberg (IKEA IMS Wholesale) and Helen Fu (IKEA Trading China).

We are catalysts of evolutionary development ... customer by customer, order by order. Every customer is unique and our role is to make their logistics more efficient in every way, every day.

www.apclogistics.com From left: Bengt E Johansson (Swedish CSR ambassador), John Morrison (Institute for Human Rights and Business), Leyla Ertur (H&M), Mark Hodge (Global Business Initiative on Human Rights) and Malin Oud (Tracktwo).

Going beyond compliance n At a seminar on 23 October in Shanghai about “Sustainability and CSR Beyond Compliance”, the sustainability directors of three of the biggest Swedish companies, IKEA, SCA and H&M presented what they do to go beyond compliance.

H&M’s Veronique Rochet explained how the company runs many programmes to improve their suppliers’ ability to be compliant with the law, and more importantly, to go beyond the law towards best practice in environmental protection, management practices and working conditions.

Helen Fu of IKEA made it clear how the company integrates sustainability through the whole value chain, starting from the product design through purchasing and production to the finished products, and even including end-customers. Wesley Chiu, of SCA, a leading hygiene products and forest company, discussed how traditional tree planting is used as a corporate social responsibility (CSR) activity in an innovative way.

A big crowd gathers in Suzhou to hear more about the fight against corruption.

Corruption issues discussed in Suzhou n On 27 October, the Swedish chamber arranged a business event in Suzhou on the theme “The Fight Against Corruption in China”.

Peter Idsäter, resident partner at Mannheimer Swartling, and Lars-Åke Severin, CEO at PSU, discussed the current anticorruption campaign in China and its implications for business and business conduct. They have many years of practice in advising 34 DRAGONNEWS • NO.04/2014

Driven

clients and shared their experiences with real life examples.

Topics covered were, for example, how to prevent corruption, how to address problems related to corruption and bribery, how to relate to the Chinese anti-corruption authorities, and how to learn from others’ mistakes.

The delicate subject attracted a lot of participants working at Nordic companies in the Suzhou area.

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1. Sweden’s state secretary Erik Bromander.

2. Business Sweden’s chief representative Henrik Persson greets director-general Zhang Ming-zhong of the Ministry of Foreign Affairs.

3. Swedish student Anna Blixt with a visitor.

4. Flavors, the only Swedish restaurant in Taipei, organised the buffet.

5. Atlas Copco created a Swedish Dala horse by using balloons.

Sweden Day a great success More than 420 guests attended the first Sweden Day in Taipei, where Swedish companies were showcasing their products and technologies.

The inaugural Sweden Day event, arranged by the Swedish Chamber of Commerce in Taipei in association with Business Sweden, was held on 12 November in a beautiful old red brick house at the Huashan Cultural Park in Taipei. The event was part of the 30th anniversary celebration of the Taiwan-Sweden Joint Business Council (JBC).

The event showcased products, innovations and technologies from Swedish companies with sustainability as an overall theme.

More than 420 guests attended, invited by participants from Taiwan’s business community and VIP guests from the Taiwan-Sweden JBC. The JBC delegation was headed by state secretary Erik Bromander from Sweden’s Ministry for Enterprise, Energy and Communications, who led a group of over 20 Swedish business leaders. Vice minister Shen Jongchin of Taiwan’s Ministry of Economic Affairs led the evening delegation.

Ericsson presented its technology Connected Print, which uses printed electronics, mobile broadband and the connectivity of the human body to bring consumers a world of information with just a touch.

When a printed electronic ID is touched, the natural connectivity of the body conducts the ID signal through to a mobile device in the other hand. The device then follows the link contained in the ID and downloads the relevant content: a web page, a service, an image or a video.

Handelsbanken were present to give financial advice to the guests and SKF demonstrated its latest machinery bearings technology, showing how to keep machinery rotating smoothly.

Atlas Copco displayed one of their latest air compressors, which was actually running to demonstrate how quiet operating machinery can be today. The company used some of the air for blowing balloons to create a Dala horse – originally a traditional Swedish carved, painted wooden horse statuette – which attracted plenty of interest.

The company then donated the horse to the Chang Gung Children’s Hospital and also gave the children there some other balloon animals and toys to brighten up their day.

Companies such as Atlas Copco, Electrolux, Ericsson, Flavors (a Swedish restaurant in Taipei), Handelsbanken, IKEA, Scania, SKF and Volvo presented a number of their products and solutions, which attracted great interest from the guests and VIPs. Outside the building, buses from Scania and Volvo lined up showing how comfortable bus travel can be today. IKEA displayed a selection of dining room furniture, while Electrolux presented some of its latest products, for example the Ergorapido vacuum cleaners that were used to clean the carpets before the event started.

The food, hosted by IKEA and Flavors restaurant, included poached salmon, meatballs and a host of other Swedish delicacies and was well appreciated by the guests. The drinks were supplied with great thanks to Joel Benge, from Awbevs, who offered a selection of beers and Swedish cider, which helped to make the evening very enjoyable.

This was the first Sweden Day held in Taiwan and the chamber is looking forward to arranging this event on an annual base and hopes to see more companies becoming involved and displaying products, technology and services from Swedish companies for the Taiwan market.

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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

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Irena Busic appointed new GM

Irena Busic starts her new job in January 2015.

n The board of directors of the Swedish Chamber of Commerce in China have appointed Irena Busic as the new general manager. She will assume office in the beginning of January 2015.

“The Swedish Chamber of Commerce in China has grown considerably in recent years and it’s going to be interesting, educative and a lot of fun to be involved in further developing the chamber,” says Busic.

She is currently communications director at Stora Enso in Guangxi in southern China, and has extensive experience in business and communications, having previously worked as a PR consultant, head of media relations at the entrepreneurial organisation Företagarna, head of information at the pension insurance company AMF and press secretary/political advisor to former Foreign Minister Carl Bildt.

“It’s a pleasure to welcome Irena as the new executive director of the Swedish Chamber of Commerce in China. We were looking for someone with experience in advocacy, communication and leadership and we feel confident in our decision. Irena also contributes with her wide network of contacts and China experience,” says the chamber’s chairman Katarina Nilsson.

Network and experience sharing n The Swedish Chamber of Commerce in China has recently developed a platform to facilitate business networks as a part of its offerings. The aim is to promote experience sharing on various levels and issues or professional roles. The networks are confidential and run by a member who is experienced and passionate about a certain topic such as human resources, corporate social responsibility or holding the position of CEO, CFO or likewise.

The first to get up and running is Businet, a network for Swedishspeaking women leaders in Shanghai. The network was founded in Paris in 1995. Marie Sommar, regional communications manager for Asia at Alfa Laval, and Malin Emilson, managing director at Stitch & Cobblers, were both active members of that network.

They reconnected in Shanghai in 2012 and decided to launch Businet here, a move that has been much appreciated by Swedishspeaking women leaders. The network, which now consists of around 40 women, meets once a month to listen to a relevant speaker, hold discussions and supportively share experiences. Many fruitful business connections have also been tied during the meetings.

“More and more women are coming to Shanghai to work, so we thought that there was a need for a network with other women in the same situation,” says Sommar. “Businet in Paris was very useful to me and also provided me with a social platform and I wanted to do the same for the women in Shanghai.”

Emilson adds, “It’s great to have someone to call that has faced the same challenges as you are facing.”

To become a member you have to be recommended and will first be invited to a meeting as a guest. All members should actively engage with others present. As Emilson puts it, the network is only as good as the members make it. You can connect with Businet Shanghai on LinkedIn. The Swedish chamber urges members who want to start their own chamber business network to contact us. We will help you to get started and help facilitate the network. In Beijing, please contact karin@swedishchamber.com.cn, in Shanghai, emma@ swedishchamber.com.cn.

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Malin Emilson (left) and Marie Sommar have started a business network for Swedish female leaders in Shanghai.

Five-year visa to Sweden n Non-Swedish citizens who have visited relatives and friends in Sweden on a frequent basis over the past couple of years, may now apply for a multiple-entry visa that can be valid for up to five years. The decision to grant a visa for period longer than one year is made only after careful review of the applicant’s travel history and reasons for travelling to Sweden.

New Swedish priest in China and Hong Kong

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n Anders Johansson is the new priest at the Church of Sweden Abroad, serving the Swedish community in China and Hong Kong.

“Together with my wife Kerstin and our youngest daughter Hanna, I moved to Hong Kong in September. Over the past 20 years we have been living in Kalmar, a beautiful city on the east coast of Sweden. In Kalmar, I have served as student chaplain, as a parish priest and for the past eight years as senior chaplain in the Kalmar Cathedral,” says Johansson.

In June, it was decided that he and Kerstin were going to work in China and Hong Kong.

Their predecessors, Lennart and Lis Hamark, moved back to Sweden this summer.

“As senior chaplain of the Church of Sweden Abroad, I will hold regular Swedish services, confirmation classes, baptismals, counselling and so on. I will be visiting Beijing and Shanghai once a month to meet with the Swedes living there,” he says.

“Being a Swedish priest abroad is, like in Sweden, to take part in the daily life and share both times of need and plenty. I am looking forward to meeting you all,” says Johansson.

For more information please visit www.svenskakyrkan.se/hongkong.

Welcome Anna!

Warm congratulations to Anna Reibring, who has received the first Uppsala University Scholarship at the Swedish Chamber of Commerce in Hong Kong.

Anna will start in January 2015, and stay until December 2015. Apart from working at the chamber, she will also work to further develop the Uppsala University Alumni Association in the region.

Anna has a creative and entrepreneurial background, always positive to explore new possibilities. She will graduate from the university’s Bachelor programme in Business and Economics with a major in International Business and Marketing, before the end of this year.

We are very happy to welcome Anna to our team, and look forward to her arrival.

Swedish banking in China Dragon_News_2013.pdf 1 14-2-27 下午5:49

Anders Johansson looks forward to serving Swedes in Hong Kong and China.

Anna Reibring will join SwedCham Hong Kong in January on a scholarship.

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.

The SwedCham HK team

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

Josefine M. Mosse josefine@executivehomes.hk

40 DRAGONNEWS • NO.04/2014

HONG KONG ORDINARY MEMBERS >>>

Axis Communications Ltd Unit 1904-07, 19/F Chevalier Commercial Centre 8 Wang Hoi Road Kowloon Bay, Hong Kong Tel: +852 2511 3001 Fax: +852 2511 3208 Web: www.axis.com About us Axis offers intelligent security solutions that enable a smarter, safer world. As the global market leader in network video, Axis is driving the industry by continually launching innovative network products based on an open platform – delivering high value to customers through a global partner network.

Axis has long-term relationships with partners and provides them with knowledge and ground-breaking network products in existing and new markets.

Chamber representative Chris Cheung, General Manager Hong Kong

Clean Air Hong Kong Limited Unit 2801 New Trend Centre 704 Prince Edward Road East Kowloon, Hong Kong Tel: +852 2345 8801 Email: info@cleanairhk.com Web: www.cleanairhk.com About us Clean Air HK Limited is the exclusive distributor of Blueair in Hong Kong and Macau.

At Blueair, we believe that clean air is a human right.

We are an innovative company with an exclusive focus: designing and manufacturing the best air-purification systems available today. Blueair’s award-winning air purifiers are for people who don’t want to compromise on health, design or function. Our products help relieve the discomfort of allergy and asthma symptoms and can enhance respiratory health and well being for anyone. Blueair’s performance is proven effective, and we provide information with integrity so consumers can make informed choices.

Chamber representative Patrick Ng, Director

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Eight Partnership Ltd 17/F The Hennessy 256 Hennessy Road Wan Chai, Hong Kong Tel: +852 2892 1322 Email: partner@eightpartnership.com Web: www.eightpartnership.com

About us Eight is one of Asia’s most-awarded independent brand experience firms. Established in 1993 by Norwegian brothers Bjorn and Chris Fjelddahl, Eight delivers brand strategy, design and communications for companies such as Apple, Blackstone, Cathay Pacific, Dyson, HSBC, Starbucks, TishmanSpeyer, The Economist and others. Driven by a strong Scandinavian creative ethos and often introduced as one of Asia’s most influential firms in its field, Eight has been referred to as “the silver bullet” for big branding issues facing CEOs. Chamber representatives Bjorn Fjelddahl, Partner Chris Fjelddahl, Partner

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About us Malin Ohlsson is a Hong Kong-based Swedish silversmith and jewellery designer. Having trained both in Sweden and the UK, Malin is a master craftsman and has exhibited her work both in Europe and around Asia. Malin Ohlsson’s work ranges from conceptual yet wearable jewellery collections through to statement objet d’art. Malin Ohlsson also works close to her private clients, creating special commissioned work.

Everything is handmade by Malin herself.

Chamber representative Malin Ohlsson, Founder/Director

MIQ Logistics Hong Kong Ltd Unit 4313-4318, Level 43 Tower 1, Metroplaza 223 Hing Fong Road Kwai Fong, N.T., Hong Kong Tel: +852 2410 6900 Email: asia.raterequest@miq.com Web: www.miq.com About us With 24 owned-and-operated offices across 11 countries/ regions within Asia, MIQ Logistics has the in-country expertise, relationships and systems to give customers reliability and control over their supply chains, whether goods are in inventory or in transit. Our portfolio includes comprehensive transportation, distribution and global services, as well as an extensive list of specialised capabilities.

Strong relationships with airlines and ocean carriers ensure we can find transportation capacity for you, regardless of the destination or transit speed.

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Chamber representative Fredrik Nyberg, Director, Network Development Asia

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The International Montessori School Stanley Campus Phase III, Ma Hang Estate Stanley, Hong Kong Tel: +852 2566 7196 Fax: +852 3006 2950 Email: admin.st@montessori.edu.hk

About us At the International Montessori School (IMS), we share the aspiration of every parent: we want a life of intelligence and independence for our children, enjoyed with self-reflection, a multicultural mind set, and purposeful engagement in the world. Which is why, across our four campuses on Hong Kong Island, IMS is dedicated to nurturing and inspiring children through bilingualism, individualised program, and Montessori Learning, with a focus on independence, freedom within limits, and respect for a child’s psychological, physical and social development.

Chamber representatives Karin Ann, School Founder and Principal Anne Sawyer, School Founder and Administrator

Malin Design Ltd Tel: +852 5329 6288 Email: malin.designltd@gmail.com Web: www.malinohlsson.com

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Vein Vein Lee Gardens Shop 301-302, Lee Gardens One 33 Hysan Avenue Causeway Bay Hong Kong Tel: +852 2528 4988 Web: www.bvein.com Vein on the Yard 2 St Francis Yard Wan Chai Hong Kong Tel: +852 2804 1038

VOID Watches Ltd Unit 1204, Hollywood Centre 233 Hollywood Road Sheung Wan, Hong Kong Tel: +852 2857 6687 Email: info@voidwatches.com Web: www.voidwatches.com

About us Vein is a retail concept inspired by the passion for the understated beauty of Nordic and Scandinavian style.

Designers and brand names, both new and cherished, curated from Sweden, Denmark and Finland, form the core of our women’s offerings. All are handpicked – chosen for a distinctive cut, a unique print, an edgy detail, or exclusive materials – all hallmarks of modern classics.

Vein believes anything that is rare or difficult to come by constitutes new form of luxury. Not only in a material sense, but as it relates to qualities from grace, taste and peace of mind. Vein is here to provide those rare finds.

About us VOID Watches was originally launched in 2008 by Swedish designer David Ericsson. What started as a side project to a career in design and engineering turned into a full-time job and eventually a small company. Our watches not only tell time, they also tell the story of turning ideas into reality.

We want our watches to inspire, not only by how they look but also by what they represent; the drive to always create and always improve. Simplicity is at the core of our design philosophy, a philosophy strongly rooted in our Swedish heritage. We prefer simple shapes and use materials that are best suited for the purpose. We pay attention to the details and we never compromise on quality.

Chamber representative Melinda Wong, Founder & Director

Chamber representative David Ericsson, Founder/Designer

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Oriflame Services Hongkong Limited Unit 620, Level 6 28 Hennessy Road Admiralty Hong Kong Tel: +852 3951 9755 Email: holly.qu@oriflame.cn Web: www.oriflame.com

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YueHan (Shanghai) Trading Co, Ltd Room 2101, Xin Cheng Mansion 167 Jiangning Road Jing’an District Shanghai 200041 Tel: +86 21 6258 7424 +86 21 6258 7435 Web: www.yuehantrading.com

About us Founded in 1967 by two brothers and a friend, Oriflame is now an international beauty company selling direct in more than 60 countries around the world. Its wide portfolio of Swedish, nature-inspired, innovative beauty products are marketed through a sales force of approximately three million independent Oriflame Consultants, who together create annual sales of around €1.5 billion. Oriflame offers the leading business opportunity for people who want to start making money on day one and work towards fulfilling their personal dreams and ambitions through its unique business opportunity concept – Make Money Today and Fulfil Your Dreams Tomorrow™.

About us Our business is helping overseas brands to operate and to sell in China, through online and offline retail channels.

The business model is based on a complete set of services within fulfilment and sales. The company has two business areas: The Enabler – a Chinese business support service, and The Operator – a trading and fulfilment service for overseas brands that wants to sell their products on the Chinese market via online and offline retail channels. The service scope is within consumer products (FMCG) such as fashion and accessories, shoes and bags, baby and children’s products, safety and health products, interior decoration, etc.

Chamber representative Dan Thomas Ekberg Senior Vice President Global Business Area Africa, Middle East and Asia, Head of Greater China and Head of APAC

Chamber representatives Johan Aledal Email: johan.aledal@yuehantrading.com Mobile: +86 135 8579 9100 Johan Wikander Email: johan.wikander@yuehantrading.com Mobile: +86 159 2199 0294

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CHINA COMPANY MEMBERS >>>

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LeanNova Automotive Engineering Shanghai Ltd Room 2506, Guson Center Soho2 388 Zhongjiang Road Shanghai 200062 Tel: +86 186 2171 0075 Web: www.leannova.se

About us Automotive design and engineering with office in Shanghai.

Chamber representatives Fredric Aldelind, COO Email: fredrik.aldelind@leannova.se Mobile: +86 186 2171 0075 Tomas Camén, CEO Email: Tomas.camen@leannova.se Mobile: +86 137 6446 7805

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Biogaia Room 2101, Xin Cheng Mansion 167 Jiangning Road Jing’an District Shanghai 200041 Tel: +86 186 0177 2634 Web: www.biogaia.com About us Selling Swedish probiotics with lactobacillus reuteri for adults and infants in China. Lactobacillus reuteri is also used in Nestlé’s baby formula in China.

Chamber representative Sebastian Nummelin, Key Account Manager Email: sen@biogaia.se Mobile: +86 186 0177 2634

TAIPEI ORDINARY MEMBERS >>>

TKL Logistics Ltd Room 8108, No 29 Middle Jianguo Road Shanghai 200025 Tel: +86 21 6075 2245 Web: www.tkl.nu

Camfil 3F-11, No 36, Taiyuan Street Chubei City, Hsinchu County 302 Taiwan Tel: +886 3 560 0088 Email: Tiffany.Chen@camfil.com Web: www.camfil.tw

About us We work with sea, air and road transport all over the world and are a service company in the outsourcing of freight and freight administration. We are an independent and neutral player that provides your company with customised solutions based on your specific needs. With highly trained specialists, we provide personal service, customised transportation and shipping services of high quality.

About us Camfil offers a wide range of clean air solutions and air filtration products that allow our customers to remain focused on their core business. Our business can be defined as filter unit, power system and air pollution system including airborne molecular contamination (AMC).

Camfil Taiwan has a local service for VOC filter regeneration with a green concept.

Chamber representative Annie Chik, Branch Manager Email: annie.chik@asechina.cn Mobile: +86 138 1897 2028

Chamber representative James Lin, Managing Director

CHINA ASSOCIATE MEMBERS >>> Edvard Olsson 1505 Meijiabang Road, Bld 48 Songjiang District Shanghai 201620 Mobile: +86 138 1732 2541 Email: edvard.olsson@mail.com

Miguel Jonsson 2/F, Grand Plaza Club House 568 Julu Lu, near Shaanxi Nan Lu Shanghai 200040 Mobile: +86 136 0180 4059 Email: miguel@cosmogroup.cn

Ying Zheng Tredje Tvärgatan 11 C, Lgh 1203 SE-80284 Gävle, Sweden Mobile: +86 185 1391 5648 +46 73 629 9076 Email: zhengying0324@hotmail.com

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Volvo Group Taiwan Taiwan Branch Volvo Group Trucks Sales & Marketing and JVs APAC 18F-1, No 89, Sungren Rd Taipei 11073, Taiwan Tel: +886 2 8729 7800 Web: www.volvotrucks.com/trucks/ taiwan-market/zh-tw/Pages/Home.aspx www.udtrucks.com/zh-tw/home About us The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service. The Volvo Group, which employs about 110,000 people, has production facilities in 19 countries and sells its products in more than 190 markets. In 2013 the Volvo Group’s net sales amounted to about SEK273 billion. The Volvo Group is a publicly held company headquartered in Göteborg, Sweden. Volvo shares are listed on OMX Nordic Exchange Stockholm.

Chamber representative Fredrik Samuelson, General Manager Mobile: +886 975 967 835 Email: fredrik.samuelson@volvo.com

After hours

Doing business in Sweden?

n Books A pioneer and veteran tells his China story

n Fashion Waldner launches his sportswear brand The Swedish table tennis legend Jan-Ove Waldner is one of the most well known foreigners in China and definitely the most well known Swede. Known as Lao Wa, or “old Wa[ldner]”, he defeated all China’s top players during his active career and is one of only four male players in the history of table tennis to achieve a career grand slam (World Champion and World Cup winner in singles, Olympic gold medal in singles). The other three are all Chinese.

Waldner is also the first westerner to appear on a Chinese stamp.

In October, Waldner launched his new sportswear brand collection in Shanghai called Lao Wa Swerige, a series of classic sportswear with a refined contemporary look, and a combination of comfort and sophistication.

The Swedish journalist and author Göran Leijonhufvud, with 50 years of experience in China, has recently published his biography. It is written in Swedish, entitled Pionjär och veteran – 50 år med Kina (Pioneer and veteran – 50 years with China), and is published by Albert Bonniers Förlag. He tells about how an isolated developing country became the engine of growth for the world economy. It is also about his journey from being a searching Maoist to a critical observer of China.

As a young student in 1966, Leijonhufvud stepped off the train in Beijing and was caught up in the early days of the Culture Revolution. Back in Sweden again, he studied Chinese.

Three years later he returned as a journalist and was arrested by the masses in Shanghai. But he has continued until today as a correspondent for the Swedish daily newspaper Dagens Nyheter and later as a researcher on China.

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

n Fashion Swedish designer opens in Shanghai Viktoria Chan, a young Swedish fashion designer and entrepreneur, has opened her first store in China for her eponymous fashion label. The high-end brand is tailored towards strong independent women and has been enjoyed by fashion bloggers and Swedish royalties alike. Her latest collection carries a sombre Nordic colour palette suitable for fall and winter. The Viktoria Chan store is also the first retailer of up-and-coming Swedish watch brand Daniel Wellington.

Address: 11 Xinle Road A4, near South Shaanxi Road, Xuhui District, Shanghai Web: www.viktoriachan.com

Lawyers you want on your side

n Fashion Swedish fashion label opens in Hong Kong The new store, called Acne Studios, is located in New Henry House on Ice House Street in Hong Kong’s Central district. The Hong Kong store carries men’s and women’s ready-to-wear, denim and accessories.

Acne has partnered with the Hong Kong-based fashion group I.T, and the shop is located on a stretch of boutiques known as a high fashion destination for Hong Kong people.

The store design is dominated by perforated aluminium fittings, inspired by Acne Studios’ latest retail concept as seen in Paris and Melbourne. The reflective material, paired with minimal merchandising, creates a sense of space and openness in a relatively small retail space.

Address: Shop 9, New Henry House, No 10 Ice House Street, Central, Hong Kong Tel: +852 2955 7278 Opening hours: Monday-Sunday 11am-8pm Web: www.acnestudios.com

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

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.

Eric Pedersen, Private Banker

n Stores Find your favourites at Nordic Fika Are you in Shanghai and craving for some Swedish products, such as Norrlands Guld beer, herring or Felix ketchup? Check out the newly opened storefront shop Nordic Fika on Huangpi Road in the popular Xintiandi area.

At the shop you can also try a cup of Swedish coffee and cookies and plenty of other imported Swedish and Nordic products. It is also possible to place an order and 48 DRAGONNEWS • NO.04/2014

have your favourites delivered to your home.

Nordic Fika is an initiative by Scandic Foods Asia.

Address: 765 South Huangpi Road (corner Jiangguo Road), nearest metro stations are Xindiandi and Madang Road Tel: +86 21 5386 3309 Web: www.scandicfood.cn

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

The c hambe r and I Internet problems cause productivity losses Slow internet connections and blocked websites are creating irritation among foreigners working in China. Dragon News asked some of our members about their views. These were the questions: 1. Do you experience difficulties with your internet connection in China?

2. Does it affect your daily work performance?

3. If so, what do you do to get your daily work to run more smoothly?

And below are the answers.

Wang Zhi Småland China Support Office, Shanghai 1. “Yes. It’s especially so for me, since my work involves a lot of use of Skype and a VPN with the email server at my company in Sweden. Applications like these often suffer the most from an instable internet connection.”

2. “Yes. With no stable access to email or Skype, life becomes very inefficient at work.”

3. “To increase working time elsewhere with relatively better internet connection, for example, at home.

Sometimes, I simply have to make international phone calls on the mobile phone, which is extremely costly.”

Björn Odenbro

Ai-Leen Lim

Cleanergy, Beijing

Bird & Bird, Beijing

1. “I experience constant difficulties with my internet connection. The restricted access to non-Chinese sites and, above all, non-Chinese search engines is a big issue for me. I’ve gone from Google, to Yahoo, to Bing and anticipate that I’ll soon be forced to move to Baidu, which I’ve already tried briefly in order to establish whether it was a viable alternative for the searches I need to do. It wasn’t.

“The bigger issue for me professionally is the slow speed of the internet, especially the mobile internet, which I find is often not working at all. This creates a lot of downtime when I wait for appointments, while I’m travelling and, above all, when I’m stuck in Beijing traffic.”

2. “It definitely does have an impact on my productivity.

Keeping in touch with friends and family becomes more complicated and time-consuming, and I occasionally miss news from home and around the world. As an office, we focus mostly on Chinese policy developments, so the most relevant media is usually Chinese. Those searches can be slow, but are usually not restricted, meaning that my Chinese staff can do their work online fairly unobstructed.”

3. “Other than switching around between different search engines as they ‘fail’ one by one, not that much. To access news, I use news apps, instead of the browser on my computer, as these sometimes continue to function.

I have not had great success with VPNs, and have found both speed and accessibility rather uneven. Instead, I try to catch up on a lot of stuff when I am outside China.”

1. “Yes, all the time!”

2. “Yes, it does. I think I spend an hour, collectively, all day waiting for emails to be sent out, downloaded, or webpages to be downloaded for my work.”

3. “I connect to our Hong Kong-based server internally when I am at the office and then internet searches are faster. I also divide my time between Beijing, Hong Kong and Sweden. China is where the market is and as service providers we need to be on the ground here to assist effectively. But I get so much more work done when I’m travelling.”

Hans Fogelberg Brandon Trading, Shanghai 1. “Yes, lately the internet connection and speed have become significantly worse.”

2. “From time to time it affects my daily work when it comes to running the ERP [enterprise resource planning] system, sending/receiving files, and so on.”

3. Try to work smart, start file transfers on the computer and then do some ‘offline work’ while you wait.”

Per Brodin Elanders, Beijing 1. “Yes, network congestion …”

2. “Yes, I cannot use email and web browsers properly.”

3. “I’m considering changing providers and upgrading to another product with guaranteed bandwidth.”

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 [SEB] Eva Henriksson [Henriksson Consulting] Karine Hirn [East Capital] Walter Jennings [Kreab Gavin Anderson] Pontus Karlsson [Happy Rabbit] Staffan Löfgren [ScanAsia Consulting] 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] Liselotte Duthu [Atlas Copco] Birgitta Ed [Six Year Plan] Karine Hirn [East Capital] Chunyuan Gu [ABB] Peter Idsäter [Mannheimer Swartling] Daniel Karlsson [Asia Perspective] Martin Pei [SSAB] Peter Sandberg [Tobii]

50 DRAGONNEWS • NO.04/2014

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

Shanghai – Mikael Westerback +86 21 6329 8877 ext 888, Pontus Gertell +86 21 6329 8877 ext 848