Changing tides in the relationship between Norway and China is creating a wave of opportunities for both Norwegian companies in China and Chinese companies in Norway. Business Review follows several stories on the sidelines of the Norwegian official visit to China. Pages 6-13.
Norway and China have a long, joint history. Norway was among the first Western countries to establish diplomatic relations with China, in 1954. But our common history goes far beyond this date. For instance, the Norwegian company DNV – Det Norske Veritas - established its first office in Xiamen in 1888. Norwegian ships made regular visits to Chinese ports long before that.”
We talked with the ambassador about more recent developments in the Norway-China relationship. “There is an expressed wish by our two Governments to move our relationship forward toward increased cooperation and dialogue on a broad range of topics in the wake of the normalisation [of the relationship]. This was clearly illustrated during the visit of Norway’s Prime Minister Erna Solberg to China in April. The agenda for her political meetings were very comprehensive, but I think it is fair to say that our economic and trade relations were some of the key items.
A very important outcome of the visit was that our two countries agreed to resume the negotiations on a bilateral free trade agreement. We have great hopes that this agreement will result in increased trade and investments both ways, as well as easier access for Norwegian enterprises to the Chinese market.
The most important accomplishments on the business side were the signing of several business agreements and contracts between Norwegian and Chinese companies. Six agreements on Government level were also signed. This will give Norwegian companies improved access to national and provincial partners all over China in opening up news business opportunities.
During the visit to China by the Prime Minister and the huge business delegation that accompanied her, several seminars were held. They highlighted business opportunities within a wide range of relevant sectors where Norwegian companies are highly competitive. The seminars were, moreover, excellent networking opportunities for Norwegian and Chinese businessmen and women.” Complementary Economies
According to the website of the Royal Norwegian Embassy in Beijing, “there are close to 200 Norwegian companies in China. Two Norwegian business organizations; the the Norwegian Business Association in Shanghai and Beijing and the Norwegian Chamber of Commerce in Hong Kong, contribute to the success of Norwegian companies and individuals doing business in China, and are important partners to the Embassy and the Consulates.”
Ambassador Sæther explains further, “many Norwegian companies are well-established in China and have been operating here for many years. For them, the normalisation is important as it can strengthen their relations to local, provincial and national authorities and state owned companies.
As Norway and China have complementary economies, we believe both will benefit greatly from increased trade and economic cooperation. This goes in particular for seafood and fish farming, but also sectors like oil and gas, maritime and environment are likely to benefit.
Norway’s competitive edge is in particular in our advanced offshore and maritime technology. When looking at the Norwegian geography, it becomes evident that Norwegian businesses are traditionally related to the sea. Throughout all times we have taken advantage of everything it has to offer. This has provided us with a strong economy and world leading competence in the offshore and maritime sectors as well as in seafood.
In the maritime sector, our two countries have worked together for a long time. With Norway as a shipping nation and China as the world’s largest manufacturer of ships, there are great mutual benefits to be reaped from an extended cooperation in this sector. I see a great potential for win-win synergies.
China is by now the largest shipbuilding nation in the world. Norway is highly competitive with respect to maritime operations, design and equipment, giving our countries a great potential for trade and cooperation in these fields.
Long term thinking and perseverance are key. Most of the companies with success in China have been in the country for a long time. They think in long terms, which is also the Chinese approach to business. Hence, for newcomers it will be useful to talk to companies that have been in China for a while, in order to be able to draw on their experience.” High-End Consumers Market
China is the largest consumers market in the world, closely followed only by India which will surpass China the next decades according to the United Nations’ World Population Prospects, 2015 Revision. The Chinese consumer market of 1.3 billion people is particularly interesting for Norwegian businesses according to Ambassador Sæther.
“[I]t is not only for the seafood sector that I see a bright future. I see a great potential for everything related to health and nutrition. A good example is off course Omega 3, the nutritious oil harvested from marine products. Norway has a lot to offer to the fast growing, high-end consumers market. We see an increased interest for products that are pure and clean. One such product that has been warmly welcomed to China is pure Norwegian natural water, like Voss.
Other areas are also of interest. “China is definitely doing a lot on energy and renewable energy. It is impressive how China has become the world’s largest investor in both wind and solar energy. Norway and China have been strategic partners for a long time in the field of energy and renewable energy, and we have a well-established cooperation in environment and climate related issues that goes back to the mid1990ies. This includes research and development. There are many close ties in the field of environmental research and development projects between our countries. Renewable energy is indeed high on the agenda in Norway.”
The China Global Investment Tracker published by American Enterprise Institute and the Heritage Foundation, states that China invested a record-breaking USD 56 billion in Europe in 2016. Globally, China invested USD 245.5 billion in 2016.
In the same period China invested USD 55.2 billion in the USA and USD 56.4 billion in Africa and the Arab Middle East. Since 2005 China has invested USD 227.8 billion in Europe.
The relationship with China is also important in Norway, according to the ambassador. “Norway has been open for Chinese investments for many years. In fact, Norway needs the foreign direct investments (FDI) and 25 percent of the value creation in Norway stems from FDI.
China has made several successful investments in Norway in recent years. I can here mention two in particular: In 2008, COSL bought Awilco Offshore, which is a world leading oil service company. In 2012, China National Bluestar bought ELKEM, a leading company within metal industry. When these two companies got new Chinese owners, they remained in Norway, as did the solid competence and skills that they had accumulated.
Based on what I have heard, the companies are happy with their new owners, and the Norwegian employees are happy to remain with the companies. The new Chinese management has continued to develop the firms and kept their base in Norway. I am glad to see that after several years, their competitiveness remains intact.”
With the recent normalisation of the relationship between Norway and China doors opens once more for collaboration and investments in both countries, befitting the long relationship between the two countries. Ambassador . Sæther concludes “We see a lot of promising development for both Norway and China in the years to come.”
Norwegian’s ambassador to China, Mr Svein O. Sæther looks back on the lengthy relationship Norway has with China.