Ulf Kristersson's speech at the Stockholm China Forum

Prime Minister of Swden Ulf Kristersson spoke at the GMF Stockholm China Forum on May 30, 2023. The spoken word applies.

It’s a true pleasure for me to be here today and open the 27th Stockholm China Forum. I believe I attended my first Forum in 2008 – and it feels like a different universe. But allow me to stress that Sweden is proud to co-host this leading platform for transatlantic discussions on China. I want to extend my thanks to the German Marshall Fund for this excellent partnership.

China’s rapid and assertive development over the last 15 years, coupled with its implications for not least European countries, makes transatlantic dialogue more important than ever. A unified and robust China policy and close cooperation are cornerstones of the Swedish EU Presidency.

Today, I’d like to speak about three key aspects regarding China:

• The need for de-risking and what that means;
• How to build our approach to China in close partnership with others; an
• The need for the EU to be a credible global actor in this regard.

But let me begin with a few observations on where we stand right now:

Xi Jinping recently concluded his trip to Moscow saying that the world is “undergoing changes not seen in a hundred years”.

It is always risky to read too much into a single quote, but it is true that the world is facing multiple transformational shifts. The question is what conclusions we draw from this.

Strategic balances are shifting, new technologies emerging and business models and value chains are being redesigned, but international law and human rights remain. At least that’s the way we want to see it.

Russia’s illegal war against Ukraine presents the greatest violation of the rules-based international order in decades. In response, European and transatlantic resolve have been galvanised. Our core convictions, that every nation has the right to choose its own destiny and security arrangements, will not change.

China has unquestionably changed – and continues to change – at a dramatic pace.

China is the world’s second largest economy, the world’s second most populous country and has the world’s second largest defence budget. China is today an innovation leader in many areas of technology and research, positioning itself as a powerbroker to contend with and a competitive provider of resources and expertise. This is certainly impressive.

What makes the challenge with China unique is that this economic and tech giant is also an authoritarian one-party state. Its foreign policy has become both more active and assertive.

Economic integration and new technologies have not put China on a path to more freedom as many of us perhaps hoped some 20 years ago. Rather than liberating, new technology has cemented China’s governance model. The internet was powerful, as is the great firewall of China. And AI will be a powerful tool, both here, and there. In a tech sense we have to realize that an undesirable de-coupling is already ongoing.

How China faces its economic, geopolitical and demographic challenges will shape its future. But one thing is clear: the consequences of China’s development will have a defining importance for the rest of this century.

And that means a lot - for Sweden and the EU.

Firstly: the concept of de-risking and what it means in practice.

As Ursula von der Leyen, with whom I’ve talked a lot about this, rightly stated: de-risking does not mean de-coupling, nor does it mean disengagement.

Our relationship with China should be open minded, honest and of a multi-dimensional nature. China is an integrated part of the global economy and an indispensable part of the solution to many global problems. We need to cooperate with China on fighting climate change, on improving biodiversity, global health, disarmament and conflict resolution. And numerous other issues of mutual concern.

If we don’t, the world will become a more dangerous place for all of us. But this must be a two-way street. We expect China to engage on substance and deliver on its commitments.

With this ambition in mind, Sweden established the National China Centre and will continue to invest in expertise, providing independent insights on China. Contacts also at the political level are important for keeping channels open and avoiding unnecessary misunderstandings.

We also want to deepen personal contacts between our societies. Despite all the restrictions on democratic freedoms, the Chinese society is rich and dynamic, and we should learn to know it better – from boardrooms to living rooms to social media chat rooms.

China’s development since opening up in the late 1970s is truly remarkable. We do not wish to thwart China’s development. On the contrary, we would like our successful companies to grow and thrive also in the Chinese market and our dialogue to be regular and constructive.

That means a wider de-coupling is not a viable option; it would simply not serve our interest.

In the long run, common standards, a level playing field and shared technology serve us better than a world divided into isolated parts.

However, de-risking does mean ensuring that our exchanges with China are consistent with our interests, values and security concerns.

Together with likeminded partners, we stand up for democracy and international law. We will continue to address human rights violations in China, including in Tibet, Xinjiang and Hong Kong. The same goes for the consular case of Swedish citizen Gui Minhai, which remains a priority for the new government and the entire EU. We demand for him to be released immediately. And my thoughts, and those of my fellow Swedes, are with his daughter, Angela Gui.

In terms of trade, we pursue a level playing field and fair, rules-based competition. And we welcome China to engage more constructively in international organisations. One lesson we have learnt since China’s accession to the WTO in 2001 is that we need to implement tools to address unfair competition.

In practice, de-risking means being aware of vulnerabilities and reducing excessive dependencies that may have implications for our economies and for national security.

That is not to enforce hostile policies towards China. On the contrary, it’s simply what all countries – including China – would do to safeguard their national interests.

At the EU level, we are enhancing our ability to address economic distortions and coercion and to mitigate the risks of supply chain disruptions. We will increase our capacity in areas where Europe is heavily dependent on China, for example the supply of rare earth metals. Nationally, Sweden is implementing investment screenings and enhancing the protection of Swedish citizens.

But striking the right balance between de-risking and the principles of free trade and open, competitive economies will not be an easy task. It’s key to cultivate our strengths – a tradition of trade, openness, curiosity and innovation – but at the same time defend our values and interests. No country – big or small – can any longer allow itself to be naive about this balance. 

My second point is that we need to approach China in close partnership with others.

Security in the Indo-Pacific and the transatlantic area is increasingly interconnected.

A prime example is China’s interest-based partnership with Russia, which has a direct impact on our interests and security. Let me stress the obvious – increased Chinese support for Russia’s war effort would have very negative consequences for EU–China relations.

The most important security partner for Sweden and the EU is the United States. Over the years that conclusion has been questioned. But since February 24 last year I would say it´s been proven.

The transatlantic link is fundamental for European security and prosperity. There is no contradiction between a stronger EU voice and a strong transatlantic partnership. On the contrary, as has been underlined by our joint support and efforts for Ukraine.

Therefore, the EU should share the concern for security in the Indo-Pacific. We support recent signs of closer dialogue between the US and China, because although the geopolitical tensions are set to remain, direct dialogue is a way to manage risks that concern all of us.

China’s military modernisation is reshaping geopolitics. The power projection capabilities have consequences – primarily for our close partners in the region. Ultimately, we need to safeguard the rules-based international order, and not only in Europe.

As for Taiwan, let me underline our concern regarding the escalation of tensions in the Taiwan Strait. It affects not only the people of Taiwan and the security of partners in the region but also Europe. Any crisis as a result of an attempt to change the status quo in the Taiwan Strait using force would have very far-reaching consequences.

The EU’s One China Policy remains unchanged. But we continue to be impressed by the democratic as well as economic development of Taiwan, and we remain keen to further develop our relations.

Sweden will strive to strengthen EU cooperation with partners in the Indo-Pacific, such as Japan, South Korea, Australia, New Zealand and India. The success of the recent EU Indo-Pacific Ministerial Forum in Stockholm is testimony to the potential for a wider partnership.

My third and final point is about the EU’s credibility as a global actor.

At a time when the EU’s unity on China is being tested, Europe needs to rally clearly around agreed policy while adapting to new circumstances. As the 2021 European Council conclusions stated, unity and determination will strengthen the effectiveness and credibility of EU-China relations.

The approach presented by Ursula von der Leyen makes a lot of sense: de-risking rather than de-coupling.

Our exposure to China is a matter around which the EU 27 should be able to unite. The EU’s credibility and effectiveness rests on our ability to stand up for the agreed policy and live up to our interests and values. Those now using the popular phrase that “we must not be forced to choose sides between China and the US” are asking themselves the wrong question.

As Europeans, we need to have the confidence to formulate our own open, but firm, approach but also to rely on strong partnerships with the US and other democracies. Obviously, that also requires our own societies to be both successful and democratic role models.

Democracies around the globe simply have to be competitive, successful and attractive on their own merits. Defending our values is extremely important. But in doing so, we also need to produce the best results globally in a variety of fields.

To sum up, what we need is strategic unity within, the EU and strategic partnerships beyond our union. That may create a foundation for the credibility required for the EU to be trustworthy in defending our own interests and fighting for universal values.

Thank you, and Xie xie.

Click here to be redirected to the official Swedish government website with the full transcript of the speech.