Trade

In the home of Volvo, Swedens ties with China under strain

GOTHENBURG, Sweden — Swedens second city is being pushed toward an uncomfortable reckoning in its relations with Beijing.

At a recent meeting of Gothenburgs city lawmakers, councilor Jörgen Fogelklou of the far-right opposition Sweden Democrats proposed ending a 34-year cooperation agreement with the Chinese city of Shanghai, sparking debate in the city about whether its closeness to China should continue.

The agreement, which comes up for renewal every two years, has been the basis for joint working between the two cities in a diverse range of sectors. Among other things, it has been credited with helping pave the way for the billion-dollar 2010 buyout of Gothenburg-based Volvo Cars, the citys commercial crown jewel, by the Zhejiang Geely Holding Group — a move that saved the iconic carmaker from going under.

“China is a big partner here in Gothenburg … but we have to do the right thing,” Fogelklou told POLITICO. “Our suggestion for the agreement was dont renew it.”

First signed back in 1986, the cooperation agreement covered port operations, public transport and waste management before being extended in 2003 to promote cooperation in various areas including economy, trade, science, technology and culture.

“We dont have to be that naive” — Jörgen Fogelklou, Gothenburg councilor

For many years the agreement was uncontroversial, and officials carried out visits in both directions under its auspices.

However, as Swedish and wider European relations with China have worsened in recent years — over Beijings human rights record as well as the imposition of draconian anti-protest laws in Hong Kong and fears over Chinese technology firms involvement in Europes 5G network — Gothenburgs alignment with Shanghai and with China more broadly has come into question.

Clauses in the 1986 document, including one which states that cooperation will include “the transfer of know-how, technology and goods,” are being cast in a new, more skeptical light.

Fogelklou said accusations of state-sanctioned human rights abuses in Xinjiang province and more aggressive political tactics in Hong Kong mean Gothenburg must rethink its approach to China. The jailing in China of Swedish publisher Gui Minhai, a former Gothenburg resident, on what are widely regarded as political grounds, is a further serious cause for concern, he said.

Many smaller Swedish towns and cities with similar arrangements with Chinese counterparts are now revoking them, but for Gothenburg the stakes are particularly high, and the city finds itself caught between a need to protect jobs at home and human rights abroad.

Volvo employs thousands of workers at its sprawling plant to Gothenburgs north and thousands more jobs indirectly depend on it.

After months of delay, Gothenburgs lawmakers ultimately decided to leave the agreement with Shanghai in place at least until 2021, but the council couched its decision with various caveats, including one saying that no new action plan would be developed in connection with the agreements renewal.

The debate over the agreement also made headlines in Gothenburg in a way that hadnt been seen before.

A columnist in the local daily GT condemned the recent aggressive tone taken by the Chinese ambassador to Sweden over the Gui Minhai case and said Gothenburg should shift stance.

“China has seriously damaged Swedish-Chinese relations and in so doing made the decision easier and much more necessary to cut as many political ties as possible,” the columnist, Csaba Perlenberg, wrote in April.

Mayor Axel Josefson declined to speak to POLITICO about the cooperation agreement with Shanghai, but told Swedish public radio earlier this year that he thought “dialogue and discussion is better than conflict and isolation” when it comes to trying to influence the situation in China.

Volvo is Gothenburgs commercial crown jewel | Olivier Morin/AFP via Getty Images

Outside city hall, there were mixed feelings about Gothenburgs relations with China.

“Lots of people here are unhappy about the situation in China, but the reality is that they might be able to help us if our economy crashes,” said Simon Åhman, a 16-year-old student out shopping. “Who knows, if we build the bonds strong enough with them, we might be able to influence them in some areas,” he said.

The situation in Gothenburg was an example of the far-reaching ripple effects of the dramatic shift now underway in relations between China and the West.

After decades of economic integration, the administration of U.S. President Donald Trump is now engaged in a partial reversal of the process, imposing a raft of trade tariffs on Chinese imports and seeRead More – Source