This week, Swedish Prime Minister Stefan Löfven is visiting China in a bid to resuscitate bilateral economic ties with new deals on green innovation and sustainability. However, there are reasons why Swedish-Chinese relations remain somewhat frosty.

With four ministers and the representatives of 40 Swedish companies (including Ericsson, Ikea and Scania) in his entourage, Stefan Löfven’s emphasis on economic cooperation is obvious. The goal of the largest Swedish delegation ever to visit China is to promote Swedish exports and attract Chinese investments.

Last year, Sweden exported goods to the tune of 46 billion SEK ($5.2bln) to China, making it Sweden’s tenth largest export market. The Chinese market is becoming increasingly important for Swedish companies. In the first quarter of this year alone, exports increased by 33 percent, despite an overall adverse trend, the Swedish daily Dagens Nyheter reported.

In recent years, however, Sweden’s trade turnover on the Chinese market has fallen, according to SEB bank senior economist Klas Eklund. While China remains Sweden’s most important trading partner in Asia, the Nordic country’s exports to Germany are almost three times as high.

“China is a major trade nation and is a priority for Sweden; and when the prime minister himself comes with important CEOs from Swedish companies, it is a signal to China that Sweden is serious,” Klas Eklund told Swedish Radio.

According to independent councilor Frédéric Cho, the structure of the economic exchange between Sweden and China has changed, since cheap Chinese labor is no longer pivotal.

“China has been becoming increasingly expensive by the year. A Chinese worker is clearly more expensive than a Mexican worker, just to name an example,” Frédéric Cho said.

According to Cho, Chinese companies have contributed to raising the threshold of competition in a number of industries, such as high technology, transport and IT, making it virtually impossible for European and Western companies to compete. Nevertheless, he argued that Swedish experience might prove useful in urban planning, green technology and healthcare.

However, there are other things, such as ideological differences, that somewhat hamper an economic rapprochement between the two countries. In 2015, Swedish Foreign Minister Margot Wallström notoriously called Saudi Arabia a dictatorship, venturing that the country was “medieval.” This time, however, the Swedish government specifically chose to avoid putting similar labels on one-party Communist China.

“We have decided not to put labels on countries. It does not lead to improvements in any way,” Swedish Trade Minister Ann Linde said, arguing that that Swedish companies operating in the country can make a difference by creating good working conditions.

Another thing that poses a serious headache for Sweden is the fate of Gui Minhai, a Swedish citizen originally from China, who co-owns a publishing house in Hong Kong which printed books that were highly critical of Chinese politics. Gui went missing from Pattaya, Thailand in October 2015. In 2016, Giu appeared in a “confession” broadcast on a Chinese state television network, claiming to have voluntarily returned to mainland China on order to face previous charges related to a drunk-driving accident. Subsequently, Chinese state media reported that Gui was being held for “illegal business operations.” He remains in detention in China a year after his disappearance, which Sweden believes to constitute abduction and coercion.

“Can Sweden pretend to have normal relations with China as if nothing happened after the Chinese police state kidnapped a Swedish citizen and has held him as a political prisoner, denied of human rights?” Magnus Fiskesjö, former cultural attaché at the Beijing Embassy and head of the East Asian Museum in Stockholm, wrote in an opinion piece in the newspaper Sydsvenskan.

However, despite seething criticism on the home arena, the Swedish authorities do not seem particularly enthusiastic about taking up this matter, which might have a detrimental effect on the outcome of negotiations. Stefan Löfven previously claimed to be handling the case of Gui Minhai “in the best way possible,” yet failed to clarify how exactly.

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