Are Swedish business executives giving up on China?
Friday, 31 May 2013
China, with its strong growth has long been extremely attractive for
Swedish manufacturing companies. But now the interest is fading as more
Swedish business executives start looking at China no longer as a
favourable place a place to stake their future growth trajectory.
The Swedish business daily, Dagens Industri writes that with a
tremendous amount of potential consumers, high growth rates and low
wages in China, it has been some of the drivers of Swedish engineering
companies to start operations with Chinese firms in China. The
dexterity is however, dying down and Swedish firms seem to be designing
other approaches to plot their competitive strategy than to move
The paper cites some examples as:
Jan Svensson, the boss of the Investment Company AB Latour, said
last week that it is now Europe and North America were his interest of
growth is occupying his thoughts. He strongly hold that there is still
lots of air in the American and European lungs to breathe in unlike the
European doom many people are saying. For him China is changing and
those who can see will see, before it catches up with them.
One reason is that transportation is expensive in China and that wage
costs, which were mostly, lower is now increasing by 10-15 per cent
Steel dealer, BE Group is another example. The company recently sold
its entire Chinese subsidiary, Shanghai Steel Trading. One ground for
this is the complexity China is gradually becoming.
Another company that's pulled down its Chinese operation is locking
giant Assa Abloy. The company reduced its workforce in the country by
11 percent last year and CEO Johan Molin expects to continue down the
"I think you may adjust to the fact that China is completed, "he
said to Dagens Industri when the paper's reporter caught up with him in
Shangai last spring.
Could this be the recipe for Europe regaining its lost glory, an
indirect effect of complexity of China? Let the very intelligent people
out react to this.
by Scancomark.com Team