Dragon News - No. 1, 2015

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No.01

2015 The Chinese Dream:

Where will China be in 2020?

Within five years, China is expected to have matured in many areas, growing out of its “teenager stage�. Dragon News looks into the crystal ball to find out what will happen.

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Mikael Svenungsson From the floor to the luxury store

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Irena Busic New GM with PR in her mind

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Malin Ohlsson Your home around your neck

CONTENTS 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 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 Mobile: +86 1368 179 7675 Email: shanghai@swedishchamber.com.cn

No.012015 6

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Editorial

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Opinion: Birgitta Lindqvist

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Snippets

10 Cover story: The Chinese Dream: Where will China be in 2020?

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22 Executive talk: Mikael Svenungsson 24 Feature: Irena Busic 28 Young Professional interview: Malin Ohlsson 32 Chamber activities in Hong Kong

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33 Chamber activities in Beijing 34 Chamber activities in Shanghai 36 Chamber news: Spring Board takes Fillidutt to next level 38 New members

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48 After hours 50 The chamber and I: Staying in HK/China until 2020?

Swedish Chamber of Commerce in Hong Kong

Swedish Chamber of Commerce in China

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DRAGONNEWS • NO.01/2015 3

EDITORIAL

Katarina Nilsson Chairman Swedish Chamber of Commerce in China

Ulf Ohrling Chairman Swedish Chamber of Commerce in Hong Kong

The mysterious Chinese consumer Dear Reader, China has its own unique historical, social and economic path that deserves to be understood far more widely in the West. No development precedent exists that makes it possible to forecast what will be the outcome of development in China.

Chinese consumers have consistently mystified many Western companies. Little is known about their spending behaviour and buying habits. Only a few years ago, the Chinese were consumer novices. They either looked for brand logos to show off their status, or simply wanted products that were basically functional. Today, however, millions of consumers are spending in ways that are similar to those in the West.

Chinese consumers who live in modern urban centres (roughly about 55 per cent of the total population) are becoming more individualistic. They are willing to pay premium prices for quality products and services. Rather than show off with big brands, they are beginning to personally enjoy fine things that mean something to them.

Perhaps what we are already seeing is a flight to quality in the consumer industry that has been recognised in some aspects of the Chinese B2B industry. This shift in attitude has happened in a remarkably short period of time, showing that Chinese consumers are 4 DRAGONNEWS • NO.01/2015

becoming increasingly sophisticated. Some foreign companies, however, are hesitant about entering the market, because they don’t understand Chinese consumers and their shopping habits.

In answer to that, a major change in Chinese consumer behaviour has come about through rising urban wealth and an increasingly westernised lifestyle. The resulting demand for higher-quality products, particularly among the younger generation, is likely to accelerate and present huge opportunities for foreign brands.

However, among the challenges facing Western companies is widespread counterfeiting and internet sales of fakes or rip-off foreign brand names. Internet sales are booming, as has been described in an earlier issue of Dragon News, and the boom will likely continue for the foreseeable future. This is why we applaud recent initiatives by the Chinese authorities to reduce internet sales of fake products through Alibaba and related companies. These companies need to be more aware of what their sites are used for. Is it only wishful thinking if we hope that within five years the systems will then be in place to quickly and effectively block infringers?

Chinese consumer habits are changing but not necessarily in all areas. Wine provides a good example of changing Chinese consumer habits. Spirits once dominated China’s alcohol market, but wine consumption has

skyrocketed in the past decade. McDonald’s, on the other hand, had to adapt to Chinese consumers’ unchanging eating habits by launching a range of chicken burgers when they realised that pork and chicken are much more popular than beef in China.

Despite the country’s rapid economic rise, China’s regions have developed at different rates, and consumer trends vary greatly between different groups and regions. Many hundreds of millions of Chinese continue to live in the countryside.

Unlike their rich urban cousins, these rural communities generally live in poverty.

Understanding the preferences and mindsets of the various consumer groups that exist side by side in China is, therefore, key to a successful business.

To summarise, in the years ahead, for those in China who can afford it – that is, the moderately wealthy urban population – we believe we will see a shift towards a more quality-oriented mind-set. This is in keeping with the on-going frugality campaigns, presenting opportunities to Swedish companies in China, provided that inferior and sometimes even dangerously fake copies of their products are not marketed on e-trade websites.

Lastly, we would like to take the opportunity to wish all members and readers A Prosperous and Happy New Year of the Goat!

also broadcast continuously on the radio.

Since there were no cars, there were no fumes or noise pollution either, but despite the clean air, I remember the smell of coal fires and “dung carriages” – carts filled with human excrement. The silence was deafening. There were no birds twittering, no cats meowing, no dogs barking. Our cook Lao Wang explained why: “In difficult times, we eat everything on four legs, except chairs and tables, and anything that flies, except airplanes.”

On 1 October 1969, the People’s Republic of China celebrated Chairman Mao!” its 20th anniversary, and we were invited to the ceremonies held on Tens of thousands of youths dressed in white shirts, Tiananmen Square. [China’s defence minister and second-in-charge] red scarfs, and wearing Red Guard armbands, simultaneously let go Lin Biao gave a long speech, and behind him on the balcony crowning of red balloons right in front of Mao, who was standing with his arm Tiananmen Gate stood all of China’s leaders: Mao Zedong, Zhou outstretched in a gesture of benediction.

Enlai, Jiang Qing, and the others, in their green uniforms and their caps crowned with a red star. They waved to the masses, Since we were completely isolated from the rest who were singing revolutionary songs and brandishing of the world, there was nothing else to do but to learn Mao’s Little Red Book.

Chinese. I asked the Beijing Service Bureau for a teacher The parade that followed Lin Biao’s speech lasted and was appointed a young woman surnamed Shu. One for two hours. A million people marched by our stand morning, she arrived on her bicycle, and showed her in perfect unison. Entire workplaces had been built on The number of foreigners ID card to the guards downstairs, who also checked her floats: a power station, a dam, a steel factory and the rice living in China in 1969, bag. She was dressed in green trousers and a blue jacket, terraces of Dazhai, Guangxi province. Actors pretended when Birgitta Lindqvist but around her shoulders, she wore a unique scarf with to be hard at work, only pausing in their efforts to salute arrived. Most of them a flowery pattern. Shu was 24 years old, just like myself, Mao. As they passed the large gate, they all turned their were diplomats. and she was a passionate teacher. From that morning faces towards their Helmsman, and cried out, “Long onwards, she gave me daily private lessons, and little by Live Chairman Mao!” little, I learned Chinese.

In between the floats, a large ship floated by on a seabed of blue When summer came, we travelled back to Sweden, like all other material held up by people’s hands. Women dressed in traditional diplomats, but as soon as we returned to Beijing, I called the Service minority clothing with red paper hairdos danced along, perfectly Bureau, and asked for Shu. A cold voice simply answered that there had choreographed. Others carried gigantic statues and portraits of Mao never been any teacher by that name available. The next day, a young, surrounded by red banners, and everybody chanted: “Long Live nervous-looking man arrived brandishing Mao’s Little Red Book. I asked him about Shu, but he looked at me with fear in his eyes, opened a Chinese language learning manual, and immediately delved into a relevant vocabulary list: communism, fight, great leap forward, socialism.

Only much later did I find out that Shu had been sent out to the countryside in order to be re-educated and to undergo labour reform.

She shared this destiny with hundreds of thousands of intellectuals around China, and like many others, she did not survive.

I have often returned to China over the last 45 years, and in 2010, I received a scholarship from the Shanghai Writers’ Association, and stayed in Shanghai for three months, as a writer in residence. During that time, I got to know modern China, and met young people who knew nothing about the Cultural Revolution. Generation gaps are widening all over the world, but in China it is more than a gap. It is an abyss. b

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Memories of the past

TEXT: Birgitta Lindqvist, iblindqvist@gmail.com

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n 1 October 1949, the People´s Republic of China rose out of the ashes of a bloody civil war and the Japanese occupation. The Soviet Union was the first country to recognise the new nation with Mao Zedong at its helm, but Sweden soon followed suit, and established an embassy in Beijing.

Twenty years later, my then husband and Sinologist Christer Elm was appointed Cultural Attaché at the embassy, and the two of us moved to Beijing.

Unlike me, he spoke Chinese.

At the height of the so-called Cultural Revolution, China was closed to foreigners. Several political factions were fighting against each other, and pitched battles over political differences were not uncommon. In reality, young Red Guards seemed to be in charge, and Mao’s Little Red Book was their Bible.

When we landed in Beijing in September 1969, there were only about 200 foreigners officially present in the nation, and most were diplomats from Scandinavia, Eastern Europe, Africa and Asia. A week prior to our arrival, agitated Red Guards had stormed the British embassy, set the building on fire, and eaten the ambassador’s dogs. Famine was raging and Beijing resembled no other place on earth.

We got an apartment in a neighbourhood that had just recently been built for foreigners and it was surrounded by walls with sentries. The area was called Sanlitun, and today, it is one of Beijing’s entertainment districts.

All Chinese people were dressed in green or blue Mao jackets, cotton trousers and black canvas shoes. There were no other clothes available for sale at the one and only department store, Baihuo Dalou.

Hundreds of thousands of black bicycles, trolleybuses and trucks crowded the streets. I remember faces belonging to bodies of different ages, bodies all dressed in the same uniforms. Red banners swayed over factories, and revolutionary songs streamed out of speakers. Young Red Guards read passages of Mao’s Little Red Book out loud at stoplights across the city, and the very same quotes were

All Chinese people were dressed in green or blue Mao jackets, cotton trousers and black canvas shoes. There were no other clothes available for sale ...”

Photo: Anna-Lena Ahlström

The Swedish author and poet Birgitta Lindqvist was one of few foreigners who lived in China 45 years ago during the Cultural Revolution. She recalls some episodes from a China that was totally different compared to today.

Birgitta Lindqvist is a Swedish poet and author. She has spent a significant part of her life travelling the world, and has spent the last 30 years in Paris, where she is happy to have found a wonderful Chinese language teacher. At the moment, they are studying the speech that Mo Yan wrote for the Nobel Prize award ceremony, which she describes as a challenge. In Sweden, Lindqvist has published two poetry collections, three children’s books, five short story collections and one novel titled Where No One Can Be Reached, which is based on the author’s time in Beijing 1969-1971.

Her latest short story collection, Cruelty, was published in 2011, and it chronicles Chinese women’s destinies yesterday and today.

DRAGONNEWS • NO.01/2015 7

Dream Snippets Dream a little dream of Xi n President Xi Jinping’s slogan, “the Chinese Dream”, is today being used almost everywhere in Chinese society – for example, in collections of quotations, books and posters. It has also been the theme for the “Chinese Idol” singing contest – a local version of the popular TV show “American Idol” in the US. In Chinese, the contest is called “The Voice of the China Dream”.

“While China dream discourse generally combines socialism and Chinese tradition, the song contest shows the propaganda system’s own logistical innovations that use commercial entertainment to promote traditional Leninist messages of patriotic solidarity,” writes William A Callahan, professor at the London School of Economics and Political Science, in an analysis for the online journal The Asan Forum.

“The China dream singing contest is interesting because it highlights an important tension in the propaganda campaign’s official message: is the China dream an individual dream or a national dream? ‘The Voice of the China Dream’ suggests that it is an individual dream.

American Idol/Chinese Idol-type programmes evoke the narrative of the ‘American dream’: with a little luck and talent, and a lot of hard work, you can achieve fabulous success,” Callahan writes.

QUOTE

“We in the west misunderstand China’s aspirations because on the whole, we are woefully ignorant about its history, hopes and dreams. Most Chinese have a strong sense of their history.”

Kerry Brown, executive director of the China Studies Centre at the University of Sydney and professor of Chinese politics, in an article in The Guardian.

Did you know … n ... that Xi Jinping’s adoption of his personal slogan “the Chinese Dream” was first heard on 29 November 2012, two weeks after his appointment as the party’s general secretary and military commanderin-chief, when Xi visited the National Museum’s exhibition “Road to Rejuvenation” in Beijing? Xi told representatives from the Chinese media that the “greatest Chinese dream” was the “great revival of the Chinese nation”.

Since then, Xi and others have repeated this slogan on many occasions. By mid-2014, 8,249 articles with “China dream (Zhongguo meng)” in the title had been published within the People’s Republic of China, according to the CNKI China academic journals database.

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The Chinese Dream:

Where will China be in 2020?

Within five years, China is expected to have matured in many areas, growing out of its “teenager stage”. Dragon News looks into the crystal ball to find out what will happen.

Photo: iStock

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

The Chinese Dream (1) The Chinese Dream is President Xi Jinping’s collective vision of how to transform China into a “moderately well-off society” by 2021, the 100th anniversary of the founding of the Chinese Communist Party, and the more long-term goal of China becoming a fully developed nation by about 2049, the 100th anniversary of the founding of the People’s Republic.

For this year’s four issues of Dragon News, the Swedish Chambers of Commerce in Hong Kong and China will use the Chinese Dream as a guiding star for analysing how China will develop over the next five years when it comes to overall trends, working-life conditions, global interaction and modernisation of transportation and logistics.

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F

2020 will be around 6 per cent. ive years ago, nobody “China is in a real big slump had ever heard of Xiaomi at the moment. It’s growing up, by since the company was growing out of the teenager stage into simply on track to being being a responsible young adult. All founded. Today, the Chinese brand is countries have to go through a period the world’s third largest smartphone of transition as they develop and maker. No consumer at the time had China is no different from any other touched an iPad either, since the first country,” says Richard Harris, chief version was released in April 2010. executive of the Hong Kong-based Today, Apple has sold some 200 Port Shelter Investment Management million tablets worldwide. and a regular columnist in the South These examples show how fast China Morning Post. certain areas can develop in just half “It will take a long time for China a decade. Today, the million-dollar to carry out the transition from an question is how China will develop export economy to a country that over the next five years when it comes can rely on itself. At the moment, it to the economy, reforms, foreign completely relies on growth in the US, investment, technology, rule of law, Europe and elsewhere. Their economy energy, environment, and so on. will be in the doldrums until this Dragon News talked to some transition occurs,” he says. experts in various areas to hear their forecasts and views.

President Xi Jinping’s catchBut slow Chinese growth could actually be welcome, providing a cry is The Chinese Dream, inspired chance for China to rebalance the by the American dream, embracing world’s second-largest Chinese prosperity, collececonomy and implement tive effort, socialism and necessary reforms. national glory.

“It’s important that “We must make perChina starts to focus sistent efforts, press ahead China’s GDP on quality instead of with indomitable will, growth in 2014 quantity. Previously, the continue to push forward was the slowest high growth has to a large the great cause of socialism pace in 24 years, extent been driven by statewith Chinese characteris“only” 7.4 per cent. led investments. It’s time tics, and strive to achieve for organic growth to take the Chinese dream of great over,” says Mats Harborn, executive rejuvenation of the Chinese nation,” he director of Scania China Strategic said in March 2013 in his first address Office in Beijing and vice president to the nation after having become the of the European Union Chamber of head of state.

Commerce in China.

“China’s economy has become too ECONOMIC GROWTH: Slow GDP complicated for the central government growth gives China a chance to to run. The market has to take over rebalance and the government has to redefine In past decades, Chinese leaders had its role in the society and roll out a strong faith in that high economic regulatory framework for creating a growth would automatically guarantee market economy,” says Harborn. increased welfare for citizens and social “When growth was high priority, stability in the country. its main focus was on supporting stateHowever, in recent years there owned enterprises. Now the focus has has been a dip in the gross domestic shifted to supporting consumers. Many product (GDP) growth rate, down of them realise that China has become from double-digits over the past a better society to live in, but they decades to 7.4 per cent in 2014, which also question whether they really have was the slowest pace in 24 years. a better life when it comes to the air Both China’s government and the quality, food safety, the environment, International Monetary Fund (IMF) and so on,” he says. predict that China’s GDP growth in

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DRAGONNEWS • NO.01/2015 11

China is growing out of the teenager stage into being a responsible young adult.”

2013, is a pilot scheme for financial and other reforms. Three more zones, in Guangdong, Fujian and Tianjin, are planned to launch in March this year. It can be expected that many more similar zones will be rolled out China-wide over the next five years.

Richard Harris, Port Shelter Investment Management

FOREIGN INVESTMENTS: China no longer ‘the factory of the world’ Rising labour costs in China and easier access to skilled labour in the US are causing many American manufacturers to relocate production back to the US, according to a global management survey by the Boston Consulting Group (BCG).

The survey, which was carried out in August last year, found that the number of firms that were in the process of repatriating production had risen 20 per cent compared to one year earlier.

American manufacturers are also relocating from China to Mexico to take advantage of lower production costs and proximity to the US market. According to BCG, manufacturing in Mexico is now 4 per cent cheaper than in China.

A similar trend is the case in Europe. The British-based manufacturers’ organisation, EEF, found in a study last year that one in six companies re-shored manufacturing over the last three years, compared with one in seven in 2009. Production was most commonly brought back from China to Britain, followed by countries in Eastern Europe.

Other Asian markets have also started to attract foreign-invested enterprises at China’s expense. Over the past five years, manufacturers of textiles, garments and shoes have shifted much of their production from China to Vietnam and Bangladesh.

Besides being an investment manager, Richard Harris is also a host at the Hong Kong radio station RTHK and a newspaper columnist.

REFORMS: More market forces will come into play China has massive problems to deal with. Reforms are required on almost every level of society.

Most industries are not consolidated, and almost every sector has a problem with overcapacity. China’s state-owned banks tend to prefer to lend to state-owned enterprises (SOEs) that also often have access to cheap land and energy, instead of financing millions of jobcreating private companies China has around 110,000 SOEs, of which some 120 are considered central – governed directly by the central government.

The government’s goal is to reduce the huge number of SOEs through mergers and acquisitions and create a smaller group of large conglomerates.

“China must define what industries should have a strategic role and let the rest be exposed to competition. For example, the automotive industry cannot be considered as strategic for China any longer, but the telecommunications industry may still be and the publishing sector still is,” says Harborn.

China’s huge stimulus package in conjunction with the global financial crisis led to growing problems with destruction of assets and overcapacity in all industries, especially in the lower part of the value chain. Car companies started to produce cheap, low-quality cars, developers constructed buildings with poor standards, and so on.

“The old joke is that China spent 3 trillion yuan on infrastructure

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from 2008 to 2012 and about half of it was useful, but nobody knows which half – and a lot of it ended up in Macau [for money laundering] ...” says Harris.

According to Harborn, overcapacity in the transportation sector, for example, has resulted in which companies are prepared to carry out logistics at any price.

“There are no clear rules for vehicles about emissions, the drivers’ work hours, safety inspections, and so on. The government has to implement tougher regulations so that unsound companies are eliminated and so that there is more fair competition among the serious players,” he says.

The financial framework, as Harborn points out, needs to be liberalised, “so that banks will become banks as we normally regard them, performing risk assessments and acting as filters that can sort out good companies from the bad ones.”

“Xi Jinping has a very tight control over China politically, as we’ve seen with the anti-corruption campaign,” says Harris. “At the same time, he wants to liberalise the economy as much as he can.

So we will see some relaxation in terms of the economy. Xi knows that the government cannot support the SOEs forever, or it will end up like Russia and go bankrupt. So I think they will bring much more market forces into the economy, while retaining a very strong political influence.”

The Shanghai Free Trade Zone (FTZ), inaugurated in September

Swedish-owned Doro, a world leader in easy-to-use phones for seniors and the hearing-impaired, shifted production from South Korea and Taiwan to China some 16 years ago.

“We have three main suppliers in China’s Guangdong Province.

They deliver around 90 per cent of our products, which mainly consist of mobile phones but also home phones and office phones,” says Calle Krokstäde, general manager of Doro Hong Kong Ltd, located in the Hong Kong Science Park, from where it handles technical coordination, logistics and quality inspections.

“Production has become more expensive but our suppliers are using highly automated processes with not so much manpower,” he says.

Doro has had continuous discussions about whether the company should continue to produce in China or move the production elsewhere.

Low-end electronics manufacturers have already moved out of China, for example to Vietnam, Cambodia or the Philippines. They have been forced to move the whole value chain there since their suppliers have already moved.

“We’re in the high-end segment and there are many advantages for Doro to produce in southern China. It is unlikely that we will not be in China in five years time, even if wages continue to rise.

Guangdong is a centre for the electronics industry and if something needs to be checked or replaced in a product it can easily be handled by our Hong Kong office on the other side of the border,” says Krokstäde.

“However, one solution could be to keep the manufacturing of the phones’ circuit boards in China but carry out the assembly of

It is unlikely that we will not be in China in five years time.”

Calle Krokstäde, Doro

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NEED A GUIPDING LIGHT BETWEEN EAST AND WEST?

A big challenge now for China is to start thinking of value instead of price.”

Mats Harborn, Scania

other parts as well as the production of manuals and gift boxes closer to the customers, which are mainly in Europe. This would lead to big savings in freight costs,” he says.

New 3D printing – or additive manufacturing – technology could also take manufacturing away from China.

“It’s a clear threat to China, when it comes to producing cheap products,” says Harris.

Harborn recommends that a company should look at production costs across the board when investing in China: “If costs for environmental protection, sustainability and safety in the workplace are added, then China’s probably not so much cheaper than, for example, countries in the West.

“A big challenge for China now is to start thinking of value instead of price,” says Harborn. “If a foreign-owned company is just looking for cheap labour, there are other alternatives. But if a company wants a share of China’s huge market it has to be there. Even with 6-7 per cent annual growth their economy will redouble in a decade.”

In 2020, China will probably no longer be dubbed “factory of the world”. Rather, its role will probably be reduced to being one of many countries competing for investments from foreignowned companies.

TECHNOLOGY: New technologies, changing consumer behaviour For a long time, Chinese consumers have mainly looked at the price. But with the rising standard of living, an emerging middleclass and some 600 million people lifted out of poverty since the 1980s, Chinese consumers have now started to value quality.

Foreign brands have become more and more popular in China – a trend that is clearly visible on the streets and in the shopping malls.

“In five years time, we will continue to see the quality gap between Chinese and foreign brands closing,” says Tim Wang, a Chinese-American, who owns and operates Tagstand, a leading online retailer of near field communication (NFC) tags and related products.

“The Chinese consumer will become more aware about purchasing for quality instead of price. If Chinese consumers are

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willing to buy quality, then domestic manufacturers will adjust and go for more quality for domestic consumption.”

NFC is a set of ideas and technology that enables smartphones and other devices to establish radio communication with each other by touching them together or bringing them into proximity.

Public-transport cards, such as Octopus in Hong Kong, are based on NFC technology and have been in use for a long time.

Today, the development of high-frequency technology makes it possible for an end-user and an enterprise to be able to connect using the same tag. It is a new way for companies to communicate with consumers. For example, ApplePay in the iPhone 6 is based on NFC. In 2011, Wang moved from San Francisco in the US to Shenzhen to work at a Chinese start-up company. In 2014, he acquired Tagstand. Since Shenzhen is a base for many hightech industries, Wang is close to his suppliers and ideally located to follow technological development and consumer behaviour in China.

“In many ways, China is ahead of the US – for example, when it comes to mobile payments. Everyone use Weixin (WeChat) to do send and receive money. Mobile payments in the US are much further behind,” says Wang.

“The US was ahead of the curve for a long time when the PC was used. When mobile came around, they moved from the PC to the phone. But for most Chinese, the phone is their very first computer. If they want to pay for something they’ll use their phone immediately. They don’t think about the PC because they never had a PC.” He has also observed different consumer behaviour between Americans and Chinese. In the US, new technology and gadgets are built into the consumers’ DNA. There is a core group of users that are willing to try new things, and when they think it’s good, it finally becomes mainstream.

“In China, you don’t have that behaviour,” says Wang.

“The motivation right now, for Chinese consumers is more to keep up with what everyone else is doing. It’s more about mass consumption. If things are not big, they won’t adopt it. The niche market almost doesn’t exist. If you are in the consumer business, you need to be ready for the masses.”

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Alibaba and Tencent have been very successful in producing the Chinese versions of eBay and Amazon that fit the Chinese buyers. Xiaomi is cheaper than an iPhone or a Samsung but not the cheapest on the market. By building its own Android-based operating system, Xiaomi phones have new exciting features not found on standard Android devices, and they also feature plenty of customisation options. The phones are mainly sold online and marketed on social media. Xiaomi simply offers good value for the money.

“There’s an enormous potential for technological development in China. Anything can happen and China is definitely capable of innovating. South Korea has also its roots in dictatorship and Confucianism, but despite that, today it’s Asia’s most innovative nation,” says Harborn.

But for the next five years, Wang does not see a wave of native innovations coming out of China: “Not because the Chinese are not smart or because they lack capability, but you can only sell things that people want to buy,” he says. “Chinese are still not ready to buy native innovations that haven’t been tried successfully anywhere else. Besides, their education system is not built for innovation.”

The internet is essential for research, and research is essential for innovation. By censoring and blocking the internet, China has chosen a path that may backfire on the country itself.

Both the American and the European Union Chambers of Commerce in China released separate surveys in February this year showing that 83 and 86 per cent of their members, respectively, believed that the internet restrictions – dubbed as China’s Great Firewall – negatively affect their member companies’ operations, are stifling research and development and discouraging executives from moving to China.

“The Great Firewall captures plenty of stuff that China needs to know – for example, a lot of research doesn’t get through,” says Harris. “But they will not know about it. That is one of the biggest hurdles that the Chinese have to get over. This can be really damaging for China.”

Wang adds: “With its censorship, China is trying to close the major source of interaction with the rest of the world. They have a different approach to IT [information technology]. In the US, IT is a tool to increase productivity, while in China, IT is a tool to increase control.”

RULE OF LAW: Slowly adjusting to Western principles?

Some 15 years ago, when Kristian Odebjer worked as a lawyer in Hong Kong, a major issue for law firms was handling intellectual property (IP) disputes between Western and Chinese companies.

Today, he and a partner serve as the Hong Kong representatives of the international law firm Magnusson, and IP issues very seldom come up.

“Of course it’s still there to some extent, but the Chinese are now developing their own patents and have a much better understanding of IP,” says Odebjer.

This is an example of improving rule of law in China.

Odebjer foresees that much will happen in this area within the next five years.

“Within business law, there’s much more rule of law today in China than there was 10 to 20 or even five years ago. Foreign

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For most Chinese, the phone is their very first computer.”

Tim Wang, Tagstand

enterprises and individuals can bring disputes to court, for example, on issues of IP and labour law. It’s not unusual today that they can win such disputes. Over the past year, we’ve seen Westerners getting severance pay in court.

“This trend will probably increase because we can see a younger generation of judges emerge that don’t see a reason not to judge according to law,” says Odebjer.

Rule of law was the theme of the Fourth Plenum last year and it has been used for the crackdown on corruption (leading some China observers to note that the theme was actually “rule by law” not “rule of law”), but Odebjer believes that the changes to the legal structure could become much more wide-ranging: “In my belief, there is a genuine endeavour to put something in place so that China gets institutions that are regulated by rules and are not simply arbitrarily.”

In China, the China International Economic and Trade Arbitration Commission (CIETAC) has acted as an alternative to

Chinese courts. But CIETAC does not enjoy the same prestige as arbitration institutes in Stockholm, London, Paris, Hong Kong and Singapore.

“But now we can see changes and a desire for increased quality since foreign arbitrators can be accepted in China’s arbitration institutions such as CIETAC and are increasingly paid fees that are close to a Western level. It could be interpreted as China realising the importance of having an adequate system for resolving commercial disputes. It’s a good example of China maturing and becoming more receptive to Western concepts,” says Odebjer.

Nevertheless, rule of law, or rule by law, in China does not mean what it does in, for example, Hong Kong, which follows principles similar to those in Britain and the rest of Europe.

Harris says that he personally knows a number of young successful Chinese businessmen and they all have chosen to be based in Hong Kong.

The reason for that, they told him, is that in Hong Kong, there is good healthcare, good schools and one thing, which they said is the most important of all, there is rule of law, which means that they can sue the Chinese government and have a chance of winning.

All the same, Wang, who has registered his company in Hong Kong, says that Hong Kong should be worried, because all the advantages that Hong Kong once had for foreign investors – for example, Englishlanguage skills, understanding of foreign cultures, its position as a financial centre and gateway to China – are all being, more or less, eroded.

“Rule of law is perhaps the only thing that differentiates Hong Kong from China today. It’s the only thing that the mainland will not be able to replicate for a long time, and it’s worth fighting for, as the young people in Hong Kong showed during the protests last year,” Wang says.

Over the past years, China has accused foreign-invested enterprises, such as Apple, Starbucks and several carmakers of price-fixing and other transgressions.

18 DRAGONNEWS • NO.01/2015

China is maturing and is becoming more receptive to Western concepts.”

Kristian Odebjer, Magnusson

But some argue the government is stepping where it has no business.

“The government has nothing to do with the issue of whether Starbucks is too expensive. It’s the consumer that decides whether he or she is willing to pay 30 or 24 yuan for a cup of coffee,” says Harborn.

Other cases are more complicated. The Britishbased pharmaceutical company GlaxoSmithKline (GSK) has been found guilty of bribery and was fined US$490 million, while the US-based telecommunications and semiconductor company Qualcomm was fined US$975 million for having used its monopoly status in mobile technology.

“Both foreign-owned and domestic companies are now being reviewed under the magnifying glass,” says Odebjer. “The criticism against Alibaba for selling fake products on the Taobao online shopping site shows that not even very successful Chinese companies are safe.

“Foreign-owned companies should be more careful and check their compliance routines – for example, within their purchasing departments,” he adds.

ENERGY AND THE ENVIRONMENT: Clean energy will increase substantially Despite all its wind farms and solarenergy plants, China still has an inefficient, energy-guzzling industry.

The country’s GDP per unit of energy use is much higher than in many other countries.

China knows that it must reduce its reliance on dirty coal and increase its use of – more expensive – renewable energy. Of the new power-generating capacity that China built in 2013, renewables such as wind and solar power for the first time accounted for more than the share comprising fossil fuels and nuclear energy.

The State Council has set a goal of

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raising the percentage of the total energy mix supplied by clean energy to 15 per cent by 2020. At that time, China’s aim is that 10 per cent of its energy is supplied by natural gas, while lowering the overall share of coal to 62 per cent from the current level of 66 per cent.

It is a big challenge for China to start thinking that economic growth and a clean environment can be bedfellows. But Sweden is an example that they can learn from. It has come further than most other countries when it comes to cross-ministerial cooperation. While the size of its economy has doubled since 1970, emission levels have almost halved.

“China invests more than any other country in renewable energy sources. The country is putting big efforts into producing electrical vehicles. But the electricity that will charge the batteries is still coming from fossil fuels,” Harborn says.

His solution is that the government should let the market decide: “Since there’s too much central planning and government control, the big risk is that the market will not come up with any solutions or innovations. It’s better to demand tough requirements and let the market solve the problem,” he says.

“Worsening air pollution has shown that there are some problems that China cannot hide. It has led to a new openness and consciousness about quality of life and what growth-at-anyprice can cause,” he adds.

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In 2020, China will be the world’s largest economy – according to the IMF, China already surpassed the US in December 2014, but the statistics, and criteria, are subject to debate. Will China, in that case, be the growth engine for the world economy in five years time?

“I don’t think so,” says Harris. “It had that role during the global financial crisis, when Chinese demand was driving steel, coal and copper prices up, but fundamentally China is not an engine of growth. The US is an engine of growth because it is performing well now while nobody else is. China cannot perform well if the rest of the world is not performing.

“However,” he adds, “I don’t want to be too bearish about China. It may well become a developed country like Japan, like Germany and the US, full of ageing people, but with plenty of dynamic young people. They have a government that is capable of making bold decisions and ensuring things are done the right away.”

“China must create the conditions for better education and healthcare,” says Odebjer. “It must handle urbanisation so that there is a more level playing field between the cities and the countryside. There are signs that the government realises this – for example, its changes to the one-child policy – but they still have a long way to go.”

All in all, China in 2020 may not have passed all the hurdles it faces, but may well have made some progress on the road set out in Xi Jinping’s Chinese Dream. b

From the floor to the luxury store “To understand the luxury brand industry in Asia, think about the fact that in Macau there are more Cartier stores than Starbucks stores,” says Mikael Lui Svenungsson, CEO at M2 Retail Solutions Asia, which is helping big brands to set up stores.

The rapidly increased wealth in China has created a shopping frenzy among mainland Chinese, so luxury brands have flocked to the big cities, setting up flagship stores. Cartier, Chloé and Piaget are other examples of big brands with stores set up by M2 and its subsidiary Lui Design. Premium brands, such as Georg Jensen, Peak Performance and National Geographic, are also on M2’s client list.

“For most of our customers, we do everything, and for some of them, we do part of the job,” says Svenungsson. “I believe we are the only company on a global basis that can roll out a whole store and take complete responsibility for it.”

Brand owners are prepared to spend lots of money on their stores but they can also get a lot in return, especially in Asia. According to Svenungsson, one retailer in Hong Kong’s Harbour City can have a turnover of HK$140 million – in one day.

“To understand the luxury brand industry in Asia, think about the fact that in Macau there are more Cartier stores than Starbucks stores,” he says.

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

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the owners of the two companies wanted to sell, he and a partner, Pär Lennartson, took over. The business grew so quickly that they had to outsource part of the production to another factory called Rydöfors, located in Rydöbruk in the coastal province of Halland, where it is the province’s oldest mill.

Two years later, they acquired that company, merged it with their own and moved its headquarters to Rydöbruk.

Svenungsson and his partner had a plan to become a big player in setting up and decorating stores. “Being a marketing person, I saw the importance of the store as a tool for the success of the retailers,” he says.

So, soon after the acquisition they said to their main customers that they would start competing with The number of stores that M2 them. They also changed the name His first child was about to has set up in 70 countries for be born, so he wanted to travel less to M2, interpreted as square metre, Danish shoe brand Ecco. and he accepted an offer to join a and later on added Retail Solutions client named Perstorp, which was to the name. poised for a consumer launch of Pergo, a brand and a company that had invented laminate flooring and had “Our offer to the customers was that if they gave its office in Trelleborg at the very south of Sweden. us the space of the store, in square metres, and gave “As head of business development, my us a budget – then we’d do the rest, such as project responsibilities included making Pergo a leading brand management, architectural drawings, construction, in Europe, so I’d got it all wrong about the travelling bringing in lighting and alarm, designing signs, and so – I ended up travelling even more than I’d done on,” says Svenungsson. previously,” says Svenungsson.

Levi’s became their first big client. The American Meanwhile, Pergo grew exceptionally fast ¬– from SEK260 million when Svenungsson started his job in 1989 to 1.2 billion three years later when he quit.

“I’d got an offer to become the managing director of a company called Burseryd Flooring in the entrepreneurial province of Småland that developed and manufactured wooden floors. After some time, we needed a carpentry and acquired Hyltebruks Snickerifabrik, which was not only a wood-shop but also a company that was producing fixtures for retail stores,” says Svenungsson.

e has helped many leading luxury brands to launch their stores in China, Hong Kong, the Middle East and Europe – such as Hermès’ store in Shanghai’s Plaza 66, Alfred Dunhill’s in Shanghai’s Twin Villas and Tiffany’s in Hong Kong’s The Landmark – but for Mikael Lui Svenungsson, chief executive officer at M2 Retail Solutions Asia, it all started with flooring.

Svenungsson was born in 1962 in Gothenburg, Sweden’s second biggest city, where he studied at the Gothenburg School of Business, Economics and Law. After graduating, he worked as a management consultant for a number of years, which involved a lot of travelling, and through a client he came to venture into interior design.

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As the head of both companies, Svenungsson started to learn a lot about retail so, in 1997, when 22 DRAGONNEWS • NO.01/2015

jeans maker had its European office in Sweden and trusted in M2 when setting up a store in the Middle East. The Danish fashion brands Ecco (shoes) and Vero Moda (clothing) came shortly after that.

“They have helped us to expand our business substantially. For example, today, we have built some 1,300 stores for Ecco in 70 countries,” says Svenungsson.

Ecco was also the springboard for M2’s decision to establish the company in Asia by setting up an office in Hong Kong in 2004, since Asia had become a bigger part of the business and the company had started to produce in China.

Mikael Svenungsson is no stranger to Paris, that is where many of his customers are based.

Our offer to the customers was that if they give us the space of the store, in square metres, and give us a budget – then we’ll do the rest.”

Mikael Svenungsson on ... ... the difference between Swedish and Danish retailers: “Swedish retailing is more focused on the low-price mass market and own their own stores like H&M or IKEA. The Danes are usually more up-market and normally uses much more franchising in their business models.” ... not having a sales department: “We get many new customers through references. Many brands are part of a group with several different brands. If we do a good job for one brand, we can get other clients within the group.” ... his favourite music: “I can listen to lots of different types of music, but my heart is in modern heavy-metal and progg. If you travel a lot, finding hobbies you can enjoy while on the road is important and music is an excellent hobby for those with such living conditions.”

Svenungsson met his wife Andrea Lui in Hong Kong six years ago when they worked together on a project for Cartier. She had her own company, Lui Design – a business involved in design and project management. They married in 2010 and three years later, the two companies merged. In between, in 2012, M2’s partners sold the majority of their shares to a Norwegian private equity firm.

The Lui Svenungsson couple have a three-year old daughter, called Jia Bi. From his two previous marriages, Svenungsson has four more children: Gustaf, 25, who is a musician and lives in London; Johanna, 22, who studies at university and competes in boxing in Sweden; and Melker, 14, and Nils, 10, who are still in school and live in Sweden.

“I’ve been travelling a lot in my life and still do.

I spend about 60 per cent of my time in Asia and 40 per cent in Europe and I work hard to spend as much time as possible with my children,” he says.

In May, he will run the Great Wall Marathon in Beijing together with his daughter Johanna. “I’ve been to Beijing many times, but I’ve never seen the Great Wall so I thought it was a good idea to run on it. It will also be a special feeling to do it together with my daughter.” b DRAGONNEWS • NO.01/2015 23

The general manager

New GM with PR in her mind

Networking groups on the agenda Even if Irena Busic has just started as the general manager of the Swedish Chamber of Commerce in China, with some 270 company members, she has some clear ideas of what she wants to do.

“I know that there is a commitment from the board of directors to find new ways to make the chamber grow and become more useful for the members, and not only for those companies that are based in Beijing and Shanghai,” she says.

Her first initiative is to start networking groups. The first of these groups is on its way and all member companies in China that are interested in discussing and learning from each other when it comes to government relations will be invited to join.

Other similar groups could be companies interested in occupational health and safety and corporate social responsibility.

“Networking is what the chamber is very good at. We need to identify the areas where the members, and potential members, really feel it is relevant for them to spend a couple of hours of experience-sharing,” says Busic.

The Swedish chamber’s new GM, Irena Busic, has a wealth of experience in politics, public relations and understanding companies’ interests.

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Busic was born in 1976 in the municipality of Gislaved, in the entrepreneurial heart of Sweden, where her Croatian parents had moved when they were in their early 20s after having been recruited by a rubber factory that needed labour from southern Europe. The parents had only planned to stay a couple of years, but they changed their mind.

For her first five years, Busic only spoke Croatian but then her parents took a brave decision and decided to assimilate 24 DRAGONNEWS • NO.01/2015

wanted a more “normal” job in Stockholm without journalists calling in the middle of the night. She was offered a job as the head of the analysis and opinion department at Novus Opinion in Stockholm. One-and-a-half years later, she was offered a job by the Finnish-Swedish pulp and paper manufacturer Stora Enso as communications director for their project in the city of Beihai in the southern China province of Guangxi, not far from the island of Hainan.

Stora Enso’s project consists of a 90,000-hectare eucalyptus plantation and an integrated board and pulp mill, which will be inaugurated in 2016.

“Even though I don’t speak Chinese, I learned how important it was for the local government that I would be attending meetings. This was such a big investment for the In 2000, when Tove Lifvendahl was appointed chairwoman community,” she says. of the Moderate Party’s Youth League (MUF), Busic was Busic stayed there for two years until the Swedish Chamber recruited as her press secretary. She moved to Stockholm and of Commerce in China asked her whether she would like to left her studies behind – politics interested her more. become its new general manager.

When Lifvendahl resigned, At first, she didn’t think so did Busic – as press secretaries it would fit her plans for the normally do. But she found a future. She had been looking new job as press secretary in the forward to going back to Sweden campaign for voting “yes” to the The years when Irena Busic worked closely with the Swedish and having the time to bond euro in the national Swedish Foreign Minister Carl Bildt. with her sister’s family. referendum in 2003, in which the “But then I thought a bit “no” side came out as a winner. more and it occurred to me that this job could be great for me. I “At that time I got to know Carl Bildt, who was very much know PR, I know how companies think, I’m used to interacting engaged for the side that said ‘yes’ to the euro,” says Busic. with Swedish embassies and consulate-generals, I have met them After the euro campaign, she joined a public relations a lot when I was travelling. I’ve also always met with delegations company in Stockholm called Prime PR and was, among other of Swedish companies. So why not, I thought,” she says. duties, hired as head of press relations at The Swedish Federation of Business Owners (Företagarna). She also had a one-year spell at AMF Pension as information manager.

She has chosen Shanghai as her base but will travel to Beijing often. She has started to explore Shanghai by making One day, an executive at AMF asked Busic whether she felt long walks – 15,000 steps per day is the target, that is some 11 to that she should give up politics. She said yes, it was probably 12 kilometres, and it is all measured by her Jawbone bracelet. time to do so, but added, “with the exception of if Carl Bildt “I read a lot and listen to podcasts from Sweden while I calls”. Soon thereafter he did and Busic joined the Ministry of walk from our new office on Nanjing Xi Lu to my house in the Foreign Affairs for three years.

French Concession,” she says and adds that she loves shopping fresh and tasty food and vegetables at the Avocado Lady store on After the general election in 2010, Bildt stayed but Busic Wulumuqi Lu. b left. After three years of constant travel around the world she themselves into Swedish society by moving to a typical Swedish neighbourhood in Gislaved.

“My four year older sister and I were the only ones in school with foreign parents. With this environment, it meant that we quickly learned Swedish,” Busic says.

After finishing school, she continued her education at Halmstad University College, where she studied literature. Later she moved to Örebro to study political science. While studying she played elite volleyboll .

“Politics had started to interest me and I felt attracted by the conservative-liberal Moderate Party. My first job was as a local campaign leader for the party’s Youth League,” says Busic.

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

ormally, a press secretary for a Swedish foreign minister stays on the job for only one-and-a-half years due to the heavy workload and the extreme amount of travel. But Irena Busic stayed for three years working for Carl Bildt from 2008 to 2010.

If you needed it, that is evidence that the Swedish Chamber of Commerce in China has a very capable general manager.

Busic was appointed to the position late last year and started her work in January this year.

“I’d been actively engaged in politics for several years and I’d always admired Carl Bildt. When I got the chance, I took it,” says Busic.

She recalls many memories from those years, such as meeting with the former US state secretary Hillary Clinton and president Barack Obama in Washington DC. She visited Afghanistan five or six times as well as former Soviet Union countries that few people can pronounce or spell.

“Flying in a helicopter over Afghanistan together with Carl Bildt and [the late] Richard Holbrooke, who was Obama’s special advisor on Afghanistan, was really a special feeling. Sometimes I was thinking, how did I really end up here?” she says.

The Swedish chamber’s new general manager, Irena Busic, is promoting networking.

2008-2010

Flying in a helicopter over Afghanistan together with Carl Bildt and Richard Holbrooke was really a special feeling.”

DRAGONNEWS • NO.01/2015 25

Security in China This is the first article in a series about risk and security related challenges in China in which we describe a number of actual cases. We analyse the problems, the solutions, and how the problems could have been avoided.

“Western management tend to trust local staff too quickly.”

Company makes heavy losses after

A foreign-owned company in China needs to be aware of cultural-risk areas; the results of not doing so can be expensive.

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IN 2005 AND 2006, an industrial foreignowned enterprise set up a factory in Jiangsu Province. Three years later, it established a sales office in Shanghai.

Initially, a foreigner dispatched from headquarters in Europe ran the company, which is a common approach adopted by

Conclusions

Lars-Åke Severin, PSU China

ceding control

ue to old Confucian traditions, loyalty to family and friends – and even a village or hometown – is generally stronger in China than loyalty to a company or a brand.

In a company run by Chinese, relationships can replace strategy, research and networking.

This is something that managers of foreign-owned companies in China are often unaware of. If essential controls are not undertaken properly, it can lead to serious production disruptions and financial losses, as our example below shows.

This story is based on actual events at one of PSU’s clients in China several years ago.

Some details have been changed to protect the identity of the customer.

This is an advertisement from PSU.

claims. The head office chose to ignore these issues. The subsidiary was making satisfactory profits because it was in the high-end price segment of its industry. The company also thought that it had implemented sufficient foreign firms that are establishing themselves control processes. in China.

“The company’s mistake was that it did However, since basing expatriates in China not do proper follow-ups. They thought that is expensive, factoring in the total costs of it was enough to have implemented these housing, schooling and medical insurance, many processes and trusted the local management foreign-owned companies prefer to localise the to handle it,” says Lars-Åke Severin, chief management of their operations as soon as they executive officer (CEO) of the security feel the essential framework and talent are in consultancy firm PSU China. place. Another important reason is that they Representatives of the headquarters made want local managers to run the business, since regular visits to China and its global sourcing they speak the language and are best suited to department had regular contact with the understanding local market conditions. subsidiary in China, which now employed 250 staff.

Superficially, the situation was nonAFTER THREE YEARS, the local assistant general manager, who was hired in the startproblematic until production was disrupted a up phase – and whom we will year later when dissatisfied factory call Mr Chen – took the foreign employees went on strike. general manager’s role, assuming After repeated disruptions to responsibility for operations, production, the global management together with a local production in Europe decided to take a closer manager. Let’s call him Mr Yang. look at what had actually happened However, productivity and during the year when the company efficiency at the factory dropped was run by local management. while payroll costs rose beyond The head office asked PSU to Lars-Åke Severin, CEO expectations due to overtime investigate what had gone wrong. and founder of PSU.

PSU SOON DISCOVERED, after discussions with staff, that the general manager, Chen, had a conflict with the production manager, Yang, which resulted in Yang being dismissed.

PSU also discovered that just over 60 per cent of the 200 blue-collar workers had been hired by Yang, even though the company had a local human resources (HR) manager to oversee hiring. These workers regarded Yang, and not Chen, as the real leader of the company.

All of these workers came from the same town in Jiangsu as Yang and some were even related to him. After Yang had been fired, these workers protested and also took the opportunity to raise their wages by going on strike.

“Their loyalty to Yang was stronger than their loyalty to the company, so when Yang was fired they protested by simply stopping working,” says Severin.

“Other managers knew about this loyalty between Yang and the people he had hired but didn’t interfere since they felt it was not their problem,” he adds.

The strikes caused serious production disruptions, resulting in losses of several million yuan.

PSU’S INVESTIGATION ALSO indicated that 10 per cent of the workers’ wages for the first year had been paid in cash directly to Yang, who probably shared these “cash bonuses” with the human resources manager.

However, this could not be proved.

“This would normally not happen if

headquarters had done regular checks and follow-ups, especially within areas that are exposed to risks. Foreign companies need to be more careful and not let local management get too much power,” says Severin, who strongly recommends foreign-owned companies maintain a management mix of locals and expatriates if they want to retain their corporate culture in the subsidiary.

ONE YEAR BEFORE he was appointed general manager, Chen had been asked to source premises for the sales office in Shanghai.

He found a 300 sq m office that the company decided to rent. Chen was responsible for negotiating with the landlord. However, PSU’s investigation revealed that Chen had bought the premises, without his employers’ knowledge, and was, therefore, himself landlord.

“Chinese employees are normally very loyal and proud of their employers. But one problem is that Western management tend to trust local staff too quickly and lose control. If local managers see a way of earning more money, or getting more power on decisions regarding customers and suppliers, they are sometimes inclined to take the chance. The system in China has historically encouraged people to put themselves, and their families first,” says Severin.

“In such cases, a corrupt sub-culture can develop in the company and the result will likely be high staff turnover among the honest and skilled employees and a low turnover among the corrupt ones,” he adds.

Below are some conclusions about what a foreign-owned company in China should think about to prevent disruptions to its business: • Even if local senior managers are appointed, be sure to have expatriate managers in place in some key positions – for example general manager, finance manager and in production support functions.

• Instructions are good, but follow-ups are even better. Business processes are worthless if they are not followed up on. Including an external component for audits in cultural-risk areas could be a good investment.

• If too many employees come from similar backgrounds, it can lead to groupings that tend to promote each other rather than the company’s business.

• Engage professional people when conducting interviews and fact-findings. Remember that accusing someone employed by your company of having done something potentially unethical or even criminal is a serious act. Interviews must be carried out in consideration of such a risk. If it is not, attempts to create clarity can put the company in a challenging situation.

Facts about PSU PSU was established in 2006 and is one of the leading security consultancy firms in China, with offices in Beijing and Shanghai. PSU has strategic partnerships in Asia, Europe and the US. We protect our clients’ most valuable assets: people, brands, reputations and business operations.

Our support and advice enables clients to manage the security, operational and integrity risks that come with doing business internationally.

PSU creates value through preventive strategies and actions. PSU also optimises the clients’ businesses by identifying and reducing risk, and by providing support in the form of operational resources during natural disasters, operational challenges and other disruptions to business.

www.psuchina.com.cn info@psuchina.com Beijing PSU (China) Consulting Co, Ltd B201, North 01 Business Building, No 2 Jiuxianqiao Road Chaoyang District Beijing 100015 PR China Tel: +86 10 51305675 Fax: +86 10 51305676

Shanghai PSU (China) Consulting Co, Ltd Room 502, Building B, Far East International Plaza, No 317 Xianxia Road Changning District Shanghai 200051 PR China Tel: +86 21 5212 5970 Fax: +86 21 5212 5972

Delivering Value for Scandinavian Companies Across Asia

The Hong Kong-based jewellery designer Malin Ohlsson gets inspiration from land shapes and from her grandmother’s embroidery technique of making garments.

Text: Edvard Månsson, edvard.mansson@swedcham.com.hk Anna Reibring, anna.reibring@swedcham.com.hk

Your home around your neck

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e are in Sheung Wan, just next to the financial district of Central on Hong Kong Island. We are about to enter the Cheong Sun Tower to meet with Malin Ohlsson, a Swedish jewellery designer. We take the elevator to the 13th floor to arrive at Hatton Studios, where Ohlsson is co-course director, teaching jewellery design a few nights per week.

Ohlsson greets us with a big smile, offers us a drink and we enter the studio. Inside everything is spotless, big windows bring in plenty of light, around 15 wooden desks are neatly arranged in a classroom like pattern, and a beautiful glassed-in gallery displays the work of Ohlsson and her Hatton colleagues. Upon entering the studio, we are met by a familiar smell of wood and saw that takes us back to our elementary school woodwork and carpentry classes.

Apart from teaching jewellery making at Hatton Studios, Ohlsson is the founder of the handmade jewellery brand Malin Ohlsson Jewellery – a brand that puts emphasis on craftsmanship and handmade designs. She has been running her business in Hong Kong for three years, and during this time she has been featured in design magazines and won several prestigious design awards including the 2014 Spot Design Award.

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Procurement & Supply Chain Management Organizational Improvement Growth & Expansion

In Hong Kong you need to learn how to communicate the added value of craftsmanship.

Up until today, Ohlsson has spent time working with jewellery in both Sweden and the UK, but the path that led her to become a silversmith in Hong Kong wasn’t exactly crystal clear from the beginning.

In her early school years she had always liked jewellery design, but she never had a real plan to make a career of it. After graduating from upper secondary school, she went to university like all her friends and took up political science at Lund University in southern Sweden.

Her interest in making jewellery was sparked by an evening course she undertook on it, realising almost instantly that this was what she wanted to do. After some encouraging words from her husband, Johan, she decided to put her political science studies on halt and to pursue her dream. She managed to get a one-year internship at the LOD Gallery in Stockholm, and afterwards she spent a year studying craft and design at the private art school Nyckelviksskolan.

During these years in Stockholm, Ohlsson missed her friends and family in Malmö a lot; and so she designed a necklace in the shape of her home province Skåne 30 DRAGONNEWS • NO.01/2015

in silver. Today, this piece is included in her bestselling collection, which is called “Home-sickness Collection”, with land shapes ranging anywhere from Lamma Island in Hong Kong to Brooklyn in New York, “bought by people who miss home or feel a bit patriotic,” Ohlsson says with a smile.

After two years in Stockholm, her husband got a job in London and Ohlsson decided to come along and took a Bachelor’s degree in silversmithing at Buckinghamshire New University. During her time there, people around started taking interest in her work, and she began to sell her creations to friends and then by word of mouth referral to friends of friends and other acquaintances.

Three years later, she and her husband decided it was time for yet another change of scenery – Hong Kong. This time around, Ohlsson felt she had gained enough experience to try and start her own business.

After a few months of intense networking, she got the ball rolling and managed to get her work placed in a couple of exhibitions.

As time went by, Ohlsson also noticed that Hong Kong was very different from London, in the sense that handcrafted

jewellery was quite rare. The drawback of that, she explains, is that it made it challenging to get people to understand why they should pay a premium price for something handmade.

“In Hong Kong you need to learn how to communicate the added value of craftsmanship. Once you can do that, it can become a great selling point,” she says. This was one of the biggest challenges after coming from London, where there are thousands of jewellery designers and the appreciation for handcrafted products is high.

Ohlsson sits down at her workplace, grabs a tiny, sharp-bladed saw and shows us how to make a silver charm picturing Hong Kong Island. She follows the land edges with steady hand, and before not too long she has a finished Hong Kong map in her hand.

But other pieces are extremely timeconsuming to produce. The one that brought home the top prize at the Spot Design Award, for instance – her “Mesh” neckpiece – took almost three weeks to finish. This piece was inspired by her grandmother and the embroidery technique of making garments in the past – a time when each garment would take several days, weeks or even longer to finish.

“I like to pay tribute to this era, when making something beautiful required lots of hard work and energy,” Ohlsson explains. “The feeling of accomplishment after completing such a piece makes it all worthwhile.”

So what lays in store for the future? At the moment, Ohlsson is working on a new collection called “Leaves”, which is inspired by the trees on the mountains around Hong Kong, and she has just launched her own online shop for Malin Ohlsson Jewellery (www.malinohlsson.com). She also reveals that she will return to London later this year, as well as starting another company with a friend with more focus on “fun” jewellery for the European and US markets. b Malin Ohlsson in brief Age: 32.

Occupation: Founder and designer at Malin Ohlsson Jewellery.

Lives: Hong Kong.

Time in Hong Kong: Three years.

Best thing about Hong Kong: So many impressions and things to do.

Worst thing about Hong Kong: People walk very slow and on rainy days you really have to look out for all the umbrellas in your face …

Malcolm Kemp and Nils Eliasson.

Hong Kong

Beijing Projections for the Chinese economy

Good news from SAS n The After Work seminar with Scandinavian Airlines System (SAS) attracted many people and was fully booked in an instant. Lars-Ove Filipson, SAS general manager and chief representative of Greater China and Korea, presented the news that direct flights would operate between Hong Kong and Stockholm from September 2015. The event was truly appreciated, including mingling, food and open discussions – and of course, a lot of happy future passengers.

EF continues to grow n From Lund to Hong Kong, EF Education First has been opening the world through education for 50 years, with language, academics and cultural experiences. Established in Hong Kong more than 20 years ago, in 1994, EF recently hosted its new office opening at Times Square in Causeway Bay.

n Knut Anton Mork, chief economist at Handelsbanken, gave an insightful presentation, projecting where the Chinese economy is heading and what we can expect in the years to come. According to Mork, China’s slowing economic growth is “old news” and instead he touched upon the highly relative topics of low oil prices, the Chinese real-estate bust, and the rising risk of financial instability.

Mork also pointed out how businesses that have limited access to financial support turn to other alternatives such as shadow banking. While shadow banking fills a vacuum, it also adds to financial instability because small mistakes can have large consequences, putting a cold blanket on investment activity in the Chinese economy. Mork gave many interesting insights into current and possible future rebalancing and stimulation strategies.

Embassy mapping CSR development in China n On 12 March, Beijing members had the opportunity to listen to Maisoun Jabali, counsellor and head of the Centre for Corporate Social Responsibility (CSR Centre), and be the first to hear the results on the study “Corporate Social Responsibility (CSR) Development and Trends in China” carried out by the CSR Centre of the Embassy of Sweden in Beijing and CSR Asia. The study aims to give an overview of the current CSR landscape, including major CSR concerns and challenges in China.

Speaker Maisoun Jabali (centre, standing fifth from right) with some of the participants at the breakfast presentation.

Eating safely in China Mega-trends in logistics Magnus Kårestedt observes that sea-freight has become more popular.

32 DRAGONNEWS • NO.01/2015

n Representatives of the Port of Gothenburg, an overseas member of SwedCham Hong Kong, came to Hong Kong on 13 March and held an interesting presentation on “MegaTrends in Logistics”.

Magnus Kårestedt, president and CEO at the Port of Gothenburg, touched on several major global trends as well as the company’s future plans for expansion and growth.

One of the main trends that were mentioned is an increase of containerisation, which means more and more items are being put in containers – everything from liquids to cars. According to the latest

cost and supply demands – and increased environmental awareness – companies are trying to find other and cheaper ways to transport their goods. As the shipment cost of sea-freight is lower than the shipment cost of air-freight, seafreight has naturally become a popular alternative, which also implies greater growth opportunity for the port. Currently, almost 30 per cent of Swedish foreign trade passes through the Port of Gothenburg, which offers a very wide range of routes, with traffic to over 130 destinations worldwide, including direct routes to the USA, Middle East, India and Asia.

From left, Irena Busic, Knut Anton Mork, Fredrik Ektander, Joakim Hedhill and Lars-Åke Severin.

n With guests from all Nordic countries eager for answers about what and how to eat in China, this event took place on 20 March, starting with a short presentation from the speakers, Michael Woolsey from Alltech Inc, Sinne Bundgaarde Nielsen from Arla Foods and William Smits from DeLaval China, followed by questions from the audience.

What did we find out? Well, that the situation in China is not as bad as it used to be. After the 2008 food scandals, awareness is higher and a lot of effort has gone into preventing further scandals. Nevertheless, China is so big that the scale of crises tend to be equally big. But of course, as in many other countries around the world, there are things we need to consider when buying and eating food.

As the panel was comprised of representatives from the dairy industry, most of the guidelines given were examples from the dairy industry. For example, it is not

possible to put antibiotics in yoghurt, so this could be a safe option. Also use your nose and do the smell test. If it does not smell good, throw it away. Stick to brands you know, and if it is an unknown and cheap brand be careful. Overall, the panel said, most food poisoning is due to bad hygiene when preparing the food, and recommended using hygienic chopping boards, washing and peeling all veggies and spreading your risks by eating a little bit of everything.

From left, William Smits, Sinne Bundgaarde Nielsen, Michael Woolsey and moderator Curt Bergström.

The study found that understanding and implementation of CSR in China is mainly limited to philanthropic activities and that the majority was not happy with the current state of CSR. The key challenges are weak enforcement of legislation and a lack of national strategy. Jabali also noted implementation problems within companies and a need for more practical guidelines, as well as a network that allowed companies to learn from each other.

But Jabali added that the trends and expectations for CSR in China were positive, even if it would take some time to see real results. The report can be downloaded at www.swedenabroad.se/csrbeijing/en.

Welcome, Ylva! n The Swedish Chamber of Commerce would like to give a warm welcome to Ylva Räntfors, who is the latest addition to the Beijing office. Ylva will be working with marketing and event management, and with the Young Professionals’ board in Beijing until July 2015. Ylva has lived in Beijing since August 2014, as she undertook the last semester of her Bachelor’s degree as an exchange student there. She now holds a degree in Business Administration and Marketing from Gothenburg University.

Ylva has previously worked in customer care, administration, accounting and entrepreneurship. We are very happy to be working with Ylva during this period.

DRAGONNEWS • NO.01/2015 33

Shanghai Optimise your leadership pipeline at all levels n New business challenges, new generations, changes in the workforce, leadership gaps and updated strategic positioning are some of the mega-trends that impact how companies today need to think about and act on to build their leadership pipeline for the future.

Niklas Olsson, CEO of Celemi Consulting, a company that helps organisations change and develop using “the power of learning” as the vehicle to make changes happen, at a seminar organised on 10 March, discussed the issue of ensuring continued success and strong future leadership for organisations in China. What started as a war for talent over 15 years ago in China is still a highly relevant question.

But how we manage this question today is different from how we thought about it yesterday.

Niklas Olsson and Richard Weibull of Celemi Consulting talked about leadership.

Expertise How to succeed in e-commerce

Doron Kalinko and Mette Leger at the e-commerce seminar.

n Global e-commerce today has as many exciting opportunities for growth as there are competitors fighting for customers. Executives are constantly challenged to do more with less – and achieve exponential growth and profitably.

On 2 February, Doron Kalinko, an Australian e-commerce entrepreneur who has been involved in numerous start-ups across Asia over the last 10 years, presented a case study on how his company went from a start-up with no investment to become the world’s leading designer eyewear e-retailer, selling in over 30 countries.

Kalinko, who is the co-founder and CEO of the SmartBuyGlasses Group, was showered with questions from the 30 participants at the seminar.

Cross-cultural communications training n Multinational companies in China are constantly in the delicate but critical process of balancing cross-cultural understanding and integration. Whether it be inter-office communications, negotiating with suppliers, or building relationships with clients across the Sino-Western economy, almost every office, large or small, can benefit from a cross-cultural integration programme.

Some 25 members of the Swedish chamber met for a full-day training in crosscultural communications on 10 February. Many insights, laughs and knowledge were shared among the participants.

Robert Bravo, the facilitator, has been working or consulting for several Fortune 500 companies that are expanding operations in China. Currently employed as the managing director at Compass Corporate Solutions, he has a passion for designing and conducting training programs aimed at improving workplace communication and personnel management.

34 DRAGONNEWS • NO.01/2015

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The three founders of Fillidutt, from left Stian Espelid, Fredrik Wannius and Jan Söderström.

Spring Board takes Fillidutt to the next level Spring Board is a new concept from the Swedish Chamber of Commerce. It consists of an expert panel that helps entrepreneurial member companies find solutions to different issues. The candy company Fillidutt was the first to try the experiment out and has expanded substantially since the event.

Text: Emma Gunterberg Sachs, emma@swedishchamber.com.cn

36 DRAGONNEWS • NO.01/2015

illidutt Shanghai Trading Co, Ltd – a candy company founded by three Scandinavian friends – was the first company to try out Spring Board, a new concept from the Swedish Chamber of Commerce in China.

“The Spring Board was a huge success and a great opportunity for us,” says Stian Espelid, co-founder and chief executive officer (CEO) of Fillidutt.

“Spring Board is an important cornerstone in efforts to facilitate a strong and collaborative entrepreneurial community within the Swedish business network in China,” says Peter Idsäter, member of the main board of the Swedish Chamber of Commerce in China and partner at Mannheimer Swartling.

Idsäter initiated the first Spring Board held in Shanghai on 28 April last year and was its chairman. The objective is to provide entrepreneurs, start-ups and other interested companies with the knowledge, guidance and connections they need to succeed. A Spring Board equates to a fictional board meeting, focusing on a company, its projects and its challenges. The Swedish Chamber of Commerce invites professionals from within its network who have the qualifications, tools and experience to participate as experts on the panel to help business ventures succeed.

Fredrik Wannius came to China eight years ago and had the idea to start importing European quality pick-and-mix candy targeting Chinese consumers. He met up with two old friends, Jan Söderström and Stian Espelid, and founded Fillidutt in August 2012. It took them six months to register their WFOE (wholly foreign-owned enterprise).

Fillidutt has two divisions; one is retail, with shop-in-shop, and the other is wholesale, dealing with larger quantities. The pick-and-mix concept is a door-opener and in the future Fillidutt will additionally sell packaged candy to increase sales volume.

Fillidutt operate shops in Beijing, Shanghai, Shenzhen, Chengdu and Chongqing. The wholesale business is Asiawide; for instance, most IKEA stores in Asia sell Fillidutt’s pick-and-mix selection.

Private labelling is something Fillidutt also provides and most customers are Fortune 500 companies.

“A lot of people think that what we do is fun,” says Espelid. “But to build a longlasting brand is both time consuming and requires significant capital.”

It has been a year since Fillidutt attended the Swedish chamber’s Spring Board, but Söderström says “It feels like 10 years ago … because so much has happened since then.”

The company background, its business model and the challenges Fillidutt faced was presented to a panel of experts. At the time, there were three main challenges at hand: importing and logistics, branding and financing.

“In China, the transparency of the import process is a big challenge. It is difficult to trust that the cold chain has not been broken,” says Espelid.

There is also an issue with labelling, customs clearing and lead-time. “When it came to branding we were not clear enough and hadn’t optimised our price-setting strategy”, says Söderström, adding that financing for candy products in China is not easy.

Fillidutt and the Spring Board panel engaged in a Q&A session that lasted over three hours.

“It was such a relief that everyone had signed a non-disclosure agreement so that we could be totally open with one another and provide the full picture, which resulted in better advice,” says Söderström.

Idsäter explains that the Spring Board panel needs to be tailored to match the company and its issues and challenges. The chairman interviews the nominated company in advance in order to evaluate the case and gather relevant experts for the panel.

Mikael Westerback, general manager for Greater China at Handelsbanken, served as one of the experts on the panel.

Handelsbanken has been operating in China for the last 30 years and has vast experience, from helping big multinationals, small- and medium-sized enterprises, as well as startups, with financial issues.

The Spring Board was a huge success and a great opportunity for us.”

Stian Espelid, Fillidutt

It’s very exciting to meet entrepreneurs with great ideas.”

Mikael Westerback, Handelsbanken

The Spring Board panel needs to be tailored to match the company and its issues and challenges.”

Peter Idsäter, Mannheimer Swartling

“It’s very exciting to meet entrepreneurs with great ideas. Furthermore, it’s stimulating to listen to what the other panel experts have to say as well make new business connections,” says Westerback.

Espelid and Söderström feel that they were given qualified answers to all their questions due to the diversity of the panel, which consisted of representatives from the banking, retail, legal and logistics industries, as well as consultants specialised in trading, mergers and acquisitions and business strategy.

Largely due to the advice given by the panel, Fillidutt has expanded aggressively

and doubled its turnover in one year. For example, the panel helped Fillidutt sort out what options they had for financing. There are now 140 people employed by Fillidutt compared to 86 before the Spring Board, and the decision to open a subsidiary in Taiwan and offices in Beijing and Shenzhen was also a direct result of suggestions from the panel.

Furthermore, they received sound advice on how to improve the import process, branding and price setting.

On the question of whether they would recommend Spring Board to other start-ups Espelid answers, “Definitely, but I suggest that the company has been operational for at least a year so that they have specific questions and examples for the panel.”

For future panels, Fillidutt suggests that the ratio of Western and Chinese expertise is 50/50. “It’s important to hear the Chinese viewpoint,” Söderström adds.

“Next time, perhaps we can be a part of the panel with regards to our entrepreneurial experience. There are so many exciting companies and start-ups here in China,” Espelid says.

Participating in a Spring Board event is a member benefit and is free of charge.

If you are interested in nominating your business to participate in a Spring Board or if you would like to join as an expert on the panel, please contact the Swedish chamber at beijing@swedishchamber.com.cn or shanghai@swedishchamber.com.cn. b

Fillidutt at a glance Fillidutt company Information (end-2014): Candy sales 2014: 300 tonnes.

Employees: 140.

Markets: China, Taiwan, Hong Kong, South Korea and Japan.

Points-of-sale: 130.

DRAGONNEWS • NO.01/2015 37

Abraham Lincoln reads for his son.

HONG KONG ORDINARY MEMBERS >>>

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The Andrews Group Asia Ltd (Bolon) Unit 2405, 24/F, Arion Commercial Centre 2-12 Queen’s Road West, Hong Kong Tel: +852 2545 8118 Email: info@bolonasia.com

About us Bolon is a cutting-edge Swedish design company managed by sisters Annica and Marie Eklund, the third generation of the family to own the business. Under their leadership, Bolon has been transformed from a traditional weaving mill into an international design brand, with a focus on innovative flooring and creative interiors. Bolon is a revolution in flooring. Used by some of the biggest names in international design, and developed deep in the forests of Sweden’s West Coast, Bolon gives architects, designers and developers unlimited potential to create inspiring, long-lasting flooring projects.

Chamber representatives Mark Andrews, Regional Managing Director Maria Felsgaard, Managing Director

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Dienastie Eyewear Ltd Unit 2508A, 25/F, Bank of America Tower 2 Harcourt Road Central, Hong Kong Tel: +852 5622 6876 Email: contact@dienastie.com Web: www.dienastie.com

ebp Management Consulting Limited Suite 1204, Wing On Plaza 62 Mody Road, Tsim Sha Tsui Kowloon, Hong Kong Tel: +852 2368 6008 Fax: +852 3011 6319 Email: Info.hongkong@ebp-management.com Web: www.ebp-management.com About us Ebp is a global management consulting company, specialising in supply-chain and supply-management consulting. With offices in Europe, the Middle East, North America and Asia we support our customers both on a global and regional basis. We work with medium- to largesize corporate clients to achieve demand and supplychain process excellence and improve supply-management competence. Our goal and mandate is to deliver measurable and sustainable results to our clients.

Chamber representative Frank Yan, Managing Director

The storyteller Herbert Smith Freehills 23/F, Gloucester Tower 15 Queen’s Road Central Hong Kong Tel: +852 2101 4636 Email: anders.fernstrom@hsf.com Web: www.herbertsmithfreehills.com

About us Dienastie was established in 2011 by Jesper Lindquist and was launched in Asia in early 2013. Today the company has three partners, from Sweden and the small Caribbean island of Dominica, currently based in different geographical hubs. The company’s focus is affordable eyewear aimed for the Asian markets. Currently selling both in retail stores and on multiple online platforms.

With a careful but aggressive distribution strategy the brand has grown from a small boutique concept selling in selected shops in Scandinavia, into a movement with an edgy attitude, selling in countries worldwide.

About us Operating from over 20 offices across Asia-Pacific, EMEA and North America, Herbert Smith Freehills is at the heart of the new global business landscape providing premium quality, full-service legal advice. We provide many of the world’s most important organisations with access to market-leading dispute resolution, projects and transactional legal advice, combined with expertise in a number of global industry sectors, including energy, natural resources, infrastructure and financial services.

Chamber representative Jesper Lindquist, Creative Director

Chamber representative Anders Fernström, Head of HR Asia

Every company or organisation has interesting stories to tell.

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We have the skills to make your story compelling. We package it with high-quality graphic design and distribute it in any format you like – digital, mobile, video or print.

Providing smart, entertaining and informative content is what we excel at.

We make your company’s best stories come alive www.bambooinasia.com Bamboo Business Communications Ltd (Hong Kong) +852 2838 4553 Bamboo Business Consulting (Shanghai) Co, Ltd +86 21 6472 9173

38 DRAGONNEWS • NO.01/2015

How virgin fibre can add a sweet scent of success.

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Electrolux (Far East) Limited 6/F, The Cameron 33 Cameron Road, Tsim Sha Tsui Kowloon, Hong Kong Tel: +852 2114 2668 Web: www.electrolux.com.hk

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About us PCB Vision is a leading trading company for Printed Circuit Boards (PCB). Our main products are Single sided - Double sided - Multilayer, 3 – 60 layers - Flex and Rigid/ flex – Backplanes - HDI & Microvia (blind/buried) - High frequencies/Currents - Controlled Impedance – Buried Resistors/Capacitors - Heat sinks/Copper coins. Most of our PCBs are sourced from factories in China and, with our own quality people on site in these factories, we can guaranty that our customer always will get the best quality available on the market.

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Chamber representative Ove Joraas, Managing Director

Dragon_News_2013.pdf 1 14-2-27 下午5:49

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Chamber representatives Leandro Jasiocha, Vice President, Head of Global Sourcing Operations Enrique Patrickson, Vice President, Head of Group Mergers & Acquisitions

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About us Electrolux, one of the global leaders in home appliances and appliances for professional use, sells more than 40 million products to customers in 150 countries every year.

Our focus is on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Our products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers sold under esteemed brands such as Electrolux, AEG-Electrolux, Zanussi, Eureka and Frigidaire.

PCB Vision Limited Unit 3208, Tower 1, Kowloon Commerce Centre 51 Kwai Cheong Road Kwai Chung, Hong Kong Tel: +852 3904 1490 Email: sales@pcbvision.com Web: www.pcbvision.com

Josefine M. Mosse josefine@executivehomes.hk

40 DRAGONNEWS • NO.01/2015

Get in touch with Iggesund Paperboard Asia, tel: (852) 2516 0250 fax: (852) 2516 0251 or visit iggesund.com

HONG KONG INDIVIDUAL MEMBERS >>> Lisa Boldt-Christmas Tel: +852 9446 3368 Email: lisa@swedishair.hk

Hanna Raftell Tel: +852 6333 1290 Email: raftell@netvigator.com

CHINA COMPANY MEMBERS >>> Scandinavian Airlines System Suite 430, Sunflower Tower 37 Maizidian Street Chaoyang District Beijing Tel: +86 10 8527 6100 Email: corporate.cn@sas.dk Web: www.flysas.com/en/hk/ About us SAS is the largest airline in the Nordic countries. In September 2015, SAS will launch a new direct Hong KongStockholm route with good connections to Gothenburg, Malmö, Östersund, Luleå, Umeå, Copenhagen, Oslo and many destinations in Scandinavia and Europe. SAS will be the only airline flying directly from Hong Kong to Scandinavia. The flight will depart Hong Kong five times a week with SAS’s brand new Airbus 330 Enhanced and the upgraded Airbus 340 with a new modern interior.

Viametrics HK Limited Unit 2018, 20/F, Shatin Galleria 18-24 Shan Mei Street Fotan, NT, Hong Kong Tel: +852 9178 7300 Web: www.viametrics.com About us Viametrics is a technology and knowledge company totally specialised in people counting. We provide our customers with easy-to-grasp and profitability-enhancing guidance for decision-making. As early as 1994, we developed the first people counter, and today we are one of the world’s leading players in the field. We are established in Hong Kong, a mature market for Viametrics solutions. We develop and manufacture both measurement equipment and software ourselves.

Chamber representative Patrick Fu, Asia Pacific Regional Sales Manager

Johan von Zweigbergk Tel: +852 6021 3973 Email: johan.vonzweigbergk@pmi.com

Caroline Sernrot Tel: +852 6339 9298 Email: sernrot@hotmail.com

Mekong Riverview Hotel Mekong Riverside Road PO Box 183, Luang Prabang Laos PDR Tel: +856 71 254 900 Web: www.mekongriverview.com About us Doing business in Laos? We can help with all your accommodation, travel and business needs.

Chamber representative Urban Paulsson, Owner & GM Email: urban.paulsson@gmail.com Mobile: +856 20 553 85 450

Chamber representative Lars-Ove Filipson, General Manager & Chief Representative of Greater China

Speedflex Medianet Limited 1/F, Hua Qin International Building 340 Queen’s Road Central Hong Kong Tel: +852 2542 2780 Email: charles@speedflex.com.hk Web: www.speedflex.com.hk About us Speedflex Group was established in 1981, with a view to providing the highest possible quality graphic design, printing, editorial and related services to a diverse range of corporate and financial clients.

Speedflex is the longest established company of its kind in Hong Kong, specialising in time-sensitive printing, publishing and media services, and has continuously maintained an excellent reputation for quality and reliability.

Chamber representative Charles Zimmerman, Senior Business Development Manager

42 DRAGONNEWS • NO.01/2015

Zound Industries Ltd Room C-E, 9/F, China Overseas Building 139 Hennessy Road Wanchai, Hong Kong Tel: +852 2529 9301 Email: info@zoundindustries.com Web: www.zoundindustries.com About us Zound Industries is based in Stockholm, Sweden, with offices in New York, USA and in Shenzhen China, and is home to audio accessory brands Urbanears, Marshall Headphones, Coloud and Molami. Zound Industries is a brand incubator of the highest standard. Four brands currently reside in this incubator, each with a distinct personality intended to serve a specific target audience and address their needs. This is why each brand has its own staff, products and philosophy, and is treated separately from the rest of the brands.

Chamber representative Nils Ankarcrona, CFO Oscar Axhede, Co-Founder & Brand Manager Urbanears

DRAGONNEWS • NO.01/2015 43

Nilorn Shanghai Company Limited Room 701, No 288, Chengjiaqiao Road Minhang District, Shanghai 201103 PR China Tel: +86 21 5534 8268 Web: www.nilorn.com About us Nilorn Shanghai offers warehousing and customer service setup. We are happy to help you with general questions about China, and solving problems with your customers in China even if they are not buying from Nilorn. We are happy to go out and meet customers and clients in their offices in China.

ATS AB Krokslättsgatan 7 SE-431 67 Mölndal Sweden Tel: +46 31 2096 16 Fax: +46 31 20 96 80 Web: www.ats.se About us We manufacture automotive components and use new engineering methods in the production process.

Chamber representative Rolf Berlin Email: rolf@ats.se Mobile: +46 70 799 24 89

Chamber representative Apple Chan, General Manager Email: apple.chan@hk.nilorn.com Mobile: +86 185 1619 4321

Eletta Group PO Box 5084 SE-141 05 Kungens Kurva Sweden Tel: +46 8603 0770 Web: www.eletta.com

DUXIANA Trading Co, Ltd Shanghai 2007, West Gate Building No 1038 Nanjing Road (W) Jing’an District Shanghai PR China Tel: +86 21 2206 8090 Web: www.duxiana.com

About us We oversee the design, manufacturing and sales/ marketing of industrial flow metres and pressure instruments, as well as optical analytical instruments for the wastewater Industry.

About us DUXIANA/DUX is a Swedish luxury bed and furniture maker focusing on advanced sleeping technology and design furniture with comfort. At the moment, there are nine DUXIANA retail stores in eight cities in China, selling the DUX bed, and there is also one operating Hotel DUXIANA in Shanghai.

Chamber representative Chris Engström, CEO Email: chris@eletta.com Mobile: +46 70 842 24 24

Chamber representative Oscar Ljung, General Manager Email: oscar.ljung@dux.se Mobile: +86 135 2461 4370

44 DRAGONNEWS • NO.01/2015

Current Consulting Nanjing East Road/400 Middle Zhejiang Road 4/F, Room 407, Huangpu District Shanghai, PR China Tel: +86 21 6211 1390 Web: www.current-consulting.se

SoftNET Ltd Suite 2603, 172 Yuyuan Road Jing’an District Shanghai 200040 PR China Tel: +86 21 6045 2659 Web: www.cn.softnet.si

About us Current Consulting specialises in customised sales, procurement as well as sourcing- and quality assurance solutions in China and Southeast Asia. We assist our clients to identify and manage the best suppliers for their long-term manufacturing needs. Furthermore, we offer sales support, market research and market entry services for export to China. Our CSR audits and strategic consultancy support companies add value to their brands and ensure that products are manufactured under acceptable social standards.

About us SoftNET is a telecommunications network operator established in 1996. The company has been present in in China since 2008, where SoftNet provides fast, reliable and secure connections via fibre. These connections can be local, in China, as well as cross continental – for instance connecting European/American headquarters with their offices in China. SoftNET serve companies of all sizes and in all sectors to stay connected with their operations in China.

Chamber representative Anders Bäckström, Managing Director Email: anders@current-consulting.se Mobile: +86 185 2131 4041

Chamber representative Adam Timle Email: adam.timle@softnet.eu Mobile: +86 132 6282 2069

We call our long-term responsibility the Greencarrier Spirit International transportation the Greencarrier way www.greencarrier.com

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Sigtunaskolan Humanistiska Läroverket (SSHL) Box 508 SE-193 28 Sigtuna Sweden Tel: +46 8 5925 7100 Web: www.sshl.se

Port of Gothenburg Emigrantvägen 2B SE-403 38 Göteborg Sweden Tel: +46 31 368 75 62 Web: www.portofgothenburg.com

About us We are engaged in student recruitment, marketing and building relationships with educational institutions.

Chamber representatives Margret Benedikz, Head Email: margret.benedikz@sshle Mobile: +46 72 2190 649 Lena Månsson, Consultant Email: lena.mansson@sshl.se Mobile: +46 70 2645 330

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About us Ever since the Port of Gothenburg was established in the 1600s, direct traffic to Asia and other parts of the world has been the port’s chief attribute. Today, we offer a wide range of port services. That means everything from containers, cars, high & heavy cargo, and handling of energy products to logistics, warehousing and rail transports.

The Port of Gothenburg terminals are operated by professionals, including APMT Terminals, Logent, Stena Line and DFDS Group.

Chamber representatives Magnus Kårestedt, President & CEO Email: magnus.karestedt@portgot.se Mobile: +46 70 566 25 13 Claes Sundmark, Vice President Email: claes.sundmark@portgot.se Mobile: +46 70 632 11 64

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Professional Way Limited 1109 World Union Building 109 Wulumuqi North Road Shanghai 200040 PR China Tel: +86 21 6272 5237 Web: www.pro-way.cn

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CHINA ASSOCIATE MEMBERS >>> Mikko Harju 21/F, China World Tower 3 1 Jianguomenwai Avenue Beijing 100004 PR China Tel: +86 10 5769 5600 Mobile: +86 139 0108 6201 Email: mikko.harju@fangdalaw.com

About us We are a boutique consulting company, providing assessment, leadership development and organisational development services to companies working in China.

Chamber representatives Gene Dorris, Executive Director Email: genedorris@gmail.com Mobile: +86 138 1818 1697 Richard Wood, Deputy General Manager Email: muruicha@gmail.com Mobile: +86 186 0178 2171

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CJ Ng No 9, 51 Shuicheng Nan Lu, Lane 202 Shanghai 201103 PR China Mobile: +86 136 7190 2505 Email: cydj@cydj.biz

Experience the Very Best of Sweden!

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SSHL students come from around Sweden and the entire world.

SSHL students come fromof around Sweden and the entire world.are working We have a strong tradition catering for students whose parents SSHL students come around and the entire world.are We a strong tradition of catering for students whose working andhave living abroad.

Allfrom students at Sweden SSHL are required toparents study Swedish as We have a strong tradition of catering for students whose parents are working and living abroad.

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All students at SSHL are required to study Swedish as part living of their study programme. part of their study programme.

At SSHL you get to: At SSHL you get to: • Study at one of Sweden’s most prestigious schools At SSHL you get to:

• Study at one of Sweden’s most prestigious schools • Choose from a wide range of study programmes • Study at one of Sweden’s most prestigious schools either Swedish orof English • taught Chooseinfrom a wide range study programmes taught in either Swedish or English • Choose from a wide range of study programmes • Live and study in one of Sweden’s most picturesque taught in either Swedish or English just 20 minutes Arlandmost airport • towns, Live and study in one offrom Sweden’s picturesque just 20 minutes Arlandmost airport • towns, Live and study in one offrom Sweden’s picturesque • Experience Swedish culture and traditions towns, just 20 minutes from Arland airport • Experience Swedish culture and traditions • Choose between a wide range of extracurricular • Experience Swedish culture and traditions that take in the of afternoons, • activities Choose between a place wide range extracurricular evenings and weekend that take in the of afternoons, • activities Choose between a place wide range extracurricular evenings and weekend activities that take place in the afternoons, • Visit other parts of Sweden and Europe evenings and weekend • Visit other parts of Sweden and Europe • Visit other parts of Sweden and Europe

SWEDISH SUMMER COURSES SWEDISH SUMMER COURSES Bli bättre på svenska SWEDISH SUMMER COURSES

Bli bättre på svenska

Intensive Swedish language training Bli bättre på svenska Intensive Swedish language training Experience Swedish traditions Intensive Swedish language training Experience Swedish traditions Trips to Stockholm, Uppsala Experience SwedishUppsala traditions Trips to Stockholm, Trips to Stockholm, Uppsala

TRY BOARDING TRY BOARDING TRY BOARDING During the school year, we organise

During thewhen school year, organise weekends you canwe come and During school year, organise weekends you come andlike. stay at thewhen to can seewe what it’s weekends you comeit’s andlike. stay at thewhen school to can see what stay at the school to see what it’s like.

Find out more, visit www.sshl.se Find out more, visit www.sshl.se Find out more, visit www.sshl.se

Af t e r hou r s

Doing business in Sweden?

n Concerts

n Books

Gothenburg Symphony Orchestra tours China

Swedish guidebook on Beijing

The Gothenburg Symphony Orchestra, which is the National Orchestra of Sweden, will perform in the Macau SAR and China in April.

Founded in 1905, the Gothenburg Symphony Orchestra has been called a “formidable force” among orchestras by The Guardian. Since 2013, the distinguished American conductor Kent Nagano has been the orchestra’s principal guest conductor and artistic advisor. The orchestra, which has toured the US and Europe, will start its tour in Macau on 3 February, before performing in Guangzhou, Hangzhou, Shanghai and Beijing.

The Shanghai concert on 10 April will take place in the beautiful Shanghai Symphony Hall on Fuxing Road. Members of the Swedish Chamber of Commerce will get a 10 per cent discount on tickets. There are also plans for a reception hosted by the Mayor of Gothenburg before the concert.

The concert in Beijing will be held in the National Centre for the Performing Arts on 11 April.

Early March saw the launch of Mitt Peking (My Beijing), a new guidebook for the Chinese capital written by Jojje Olsson, a journalist and author based in Beijing since 2007. The book, written in Swedish, divides Beijing into eight different districts, with recommendations on food, shopping, attractions and bars for each of the districts. It also contains about 200 of Olsson’s own photos from all around the city. Mitt Peking is published

by Karavan Förlag, Sweden’s biggest publisher of travel books.

Jojje Olsson took his Master of Journalism at the University of Hong Kong, and this is his second book on China. You can order it from the publisher’s website, www.karavanforlag.se or, if you live in China, directly from the author by email jojje@inbeijing.se.

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 Lawyers you want on your side

Sino-Swedish clothing design

Photo: Creative Commons/GSO

Petra Ringström is a Swedish clothing designer who specialises in silk. She has spent a number of years in Shanghai and, just recently, has moved back to Sweden. She is offering madeto-order fashion and will still have a showroom in Shanghai, besides one in Stockholm. Customers can choose their own styles, colours and details. All pieces are custom-made to fit. For more information, see www.petraringstrom.com.

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

n Maps Meet Sweden in Hong Kong The Consulate General of Sweden in Hong Kong has produced a map of Swedish products and services, which is available through the link www.swedishlifestylemap.com

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

Besök oss på www.nordeaprivatebanking.com eller ring kontoret i Singapore på +65 6597 1082, så bokar vi ett möte.

n Stores Cheap Monday has reached Hong Kong In 2005, the Swedish brand Cheap Monday was born and developed with a chief focus on making jeans for men and women for low prices. Cheap Monday was a great success in Sweden. The brand was bought by H&M in 2008 and can today be found in more than 35 countries worldwide, with about 1,800 stores. Cheap Monday has now opened in Hong Kong, in Harbour City and Pacific Place. Time to do some shopping!

48 DRAGONNEWS • NO.01/2015

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

Th e ch a mb e r a nd I Should I stay or should I go?

The Chinese Dream is President Xi Jinping’s collective vision of how to transform China into a “moderately well-off society” within the next five, six years, and, more long-term, becoming a fully developed nation. However, China has massive problems to deal with and reforms are required on almost every level of society.

Malin Liljert CCR CSR, Beijing “It would be interesting to stay in China long enough to follow the efforts that are being made to improve the welfare system, especially for migrant parents and children in lower-tier cities and rural areas.”

Peter Rosta Business Research Ltd, Beijing

Dragon News asked this question to some of the members: If it were possible, would you like to stay in China, or Hong Kong until 2020? Explain briefly why …

And below are the answers.

Ulf Nitenius Swedbank Shanghai Branch “On the one hand, I would indeed like to stay in China, in Shanghai, up to 2020; on the other hand, during this period I will be at an age when you are supposed to step down and plan your retirement. This is a country still in a state of transformation and convulsion. I would like to be part of this and also of course get a chance to know China and its people even more during this time.”

Karin Brofelth Axstores Far East, Shanghai “Yes, I would. After many years in China with major changes and a new president, it would be exciting to further be a part of China s transformation.

“It would be great to be able to contribute to change through improving business and social corporate compliance work standards and social and environmental conditions, while still growing our own business opportunities.”

“Staying until 2020 would mean that I’d have the privilege to follow the fascinating development of China over a quarter of a century. Compared to 1995, when I first arrived, China today is very much a different country, on every level. I’ve seen the economic growth, the improved standards of living and Chinas continued growing importance on the global arena. All this is positive, from a Chinese, as well as from an international perspective.

“However, the rapid development has also created massive challenges. The need to protect the environment and to maintain a sustainable society by fighting corruption are just a few of these challenges.

With the determination of the current regime and its visionary leadership, I’m very optimistic about China’s future and I would indeed enjoy following how these matters are firmly dealt with while I am still living and working in China.”

Michelle Norman Bolon, Hong Kong “I’ve lived in Hong Kong for six years and I would love to stay. Hong Kong is at the forefront when it comes to technology and business. It’s an exciting and dynamic city and I feel like I’d be missing out if I wasn’t here.”

Anders Lindén Elekta, Hong Kong “Yes, after two years I feel at home here. There’s a lot to do in Hong Kong. It’s safe and the climate is manageable. You have both the big city life and nature, with beautiful hiking and nice beaches.”

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.01/2015

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