Facing Beijing’s coercion, Sweden strengthens ties with Taiwan

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Taiwan Deputy Foreign Minister Harry Tseng (曾厚仁) greets Swedish delegation members on April 10. (Source: CNA)

By Huynh Tam-Sang

Amidst growing Chinese pressure, a bipartisan group of Swedish parliamentarians has called on the government to support Taiwan the same way they have supported Ukraine since February. Boriana Åberg, head of the Swedish-Taiwanese Parliamentarian Association, said that Taiwan’s outstanding performance with regard to freedom, democracy, and human rights has inspired the world. She also underlined that democracies must unite to support Taiwan’s values ​​of freedom and democracy. The recent Swedish parliamentary delegation to Taiwan has helped to underline Stockholm’s determination to strengthen ties with Taipei, enhance Taiwan’s status, and put Taiwan in the spotlight in both Europe and the Indo-Pacific region.

With Swedish lawmakers’ active engagement in filing a motion towards changing the name of Sweden’s representative office in Taiwan to “House of Sweden,” the Swedish parliament approved the proposal in late April, indicating the will of Sweden to elevate the relationship with Taiwan to a higher level. The potential name change could help expand Stockholm’s ties with Taipei beyond economic linkages. According to Sweden Democrats Member of Parliament Markus Wiechel, the name change could denote that Taiwan should be seen as a nation, rather than a province of China.

At their cores, Sweden and Taiwan share democratic values and the desire to uphold fundamental principles of democracy and human rights. Sweden has long been rated as a “full democracy” and has regularly been featured among the top five democracies in the world. As for Taiwan, the archipelago has been ranked as the top “full democracy” in Asia and the eighth globally, according to the Economist Intelligence Unit’s 2021 Democracy Index.

The governments in both Stockholm and Taipei have framed democracy as the core and leading principle for maintaining social cohesion and conducting foreign policy. The Swedish government has described democracy as “the best foundation for a sustainable society,” and has committed to provide “extensive support to democracy, human rights and the rule of law worldwide,” while working to promote democracy, especially through its “development aid policy.” Similarly, Taiwanese President Tsai Ing-wen (蔡英文) has underlined that Taiwan cherishes its “own hard-earned freedom and democracy” and “will not bow to pressure.”

Both nations have endured authoritarian intimidation throughout their histories. This has taken the form of diplomatic pressure, security threats, disinformation campaigns, and cognitive warfare. Given these shared challenges, Sweden and Taiwan possess a solid rationale for strengthening their bilateral relationship, especially when democracies worldwide are facing formidable challenges from non-democratic regimes.

Declining Sweden-China Relations

In recent years, Sweden has increasingly voiced concerns over the deterioration of democracy and human rights in China. To make the situation worse, China’s image in Sweden has declined precipitously, with nearly 60 percent of Swedes indicating that their general view of China worsened over the previous three years, according to a 2020 survey conducted by the Swedish Institute of International Affairs (SIIA-UI).

Sweden and China have locked horns over human rights since 2015, with the detention of Swedish bookseller Gui Minhai (桂敏海). The diplomatic deterioration escalated in a diplomatic spat in 2018 when Chinese tourists were thrown out of a hotel by Swedish police, a move that stirred up a tit-for-tat retaliation between Chinese and Swedish netizens. According to a report by SIIA-UI in April 2019, since the start of 2018 the Chinese government and its embassy in Stockholm have launched a number of intense campaigns against “Swedish media outlets, journalists, scholars, human rights activists, political parties and authorities” to coerce Swedish authorities and public opinion, and to “[shape] Swedish public discourse and policy in China’s favor.” With China’s intimidation, rather than attraction, towards Sweden, Beijing’s soft power in Stockholm has been dwindling.

China’s diplomatic coercion has contributed significantly to the growing alienation between Stockholm and Beijing. Last year, the Chinese embassy in Sweden exhibited aggressive behavior by threatening a Swedish journalist for his coverage of Xinjiang; engaged in “wolf-warrior diplomacy” with Swedish politicians and think-tanks; and even vowed to retaliate against Swedish telecom company Ericsson in an attempt to reverse Sweden’s ban on Huawei and ZTE in 5G contracts – a decision designed to safeguard Sweden’s national security. China’s former ambassador to Sweden, Gui Congyou (桂從友), also criticized Sweden over its support for Taiwan, going so far as to lecture Swedish journalists on how to “correctly” report on China. Swedish journalists “must renounce their prejudices and their preconceived agenda, and they must change their erroneous approach to reporting on China,” stated Gui.

Growing Sweden-Taiwan Ties

Chinese bullying has put Sweden and Taiwan on the same page, given their shared determination and refusal to succumb to Beijing’s pressure. Members of the Swedish Parliament (Riksdag) have increasingly spoken in support of Taiwan’s democracy and human rights, and have emphasized that Taiwan has been a significant partner of Sweden in terms of trade and democracy. “Taiwan is an important defender of democracy in Asia,” Jörgen Warborn, a Swedish member of the European Parliament from the Moderate Party, highlighted in October 2021. Last year, Åberg argued that democracies worldwide should “stand with Taiwan” and support Taiwan’s inclusion in the World Health Organization.

During a foreign policy speech in February of this year, Swedish minister for foreign affairs Ann Linde highlighted that “China’s international significance also affects Sweden and Swedish interests, not least in trade.” Swedish parliamentarians also criticized China’s incursions into Taiwan’s Air Defense Identification Zone (ADIZ), and called on Sweden’s government to enhance bilateral ties and exchanges with Taiwan while supporting Taiwan’s participation in international affairs. Sweden’s growing support for Taiwan has demonstrated that the Scandinavian country has embraced a values-based approach when coming to foreign policy, even as pressure from China has continued to mount.

Economic cooperation has been the core of Sweden-Taiwan ties, with both sides seeking to enhance bilateral trade. In 2021, Taiwan’s imports from Sweden reached USD $824.7 million, representing an increase of 20.66 percent over the previous year, while Taiwan’s exports to Sweden amounted to USD $769.8 million, increasing 36.14 percent. According to statistics from the Customs Administration, an agency of Taiwan’s ministry of finance, Sweden is Taiwan’s largest trading partner in Northern Europe. Given Sweden’s belief in “open trade” as the basis for the recovery of the global economy, Taiwan’s growing contributions to the global supply chain make it a natural partner.

Sweden’s economy is also gravitating towards Taiwan, as Swedish companies have been increasingly eager to enter the Taiwanese market. Sweden’s investment activities in Taiwan have focused primarily on wholesale and retail, information and communication, machinery and equipment manufacturing, and manufacturing of electronic components. From January to September 2021, Sweden’s cumulative investment in Taiwan reached USD $575 million. Major Swedish investors in Taiwan include the home furnishing company IKEA, medical solution provider SHL, and AstraZeneca.

According to Fredrik Boye, chief executive officer at Swedish Chamber of Commerce Taipei, “Swedish companies’ employees are around 14,000 people in Taiwan, and the number is growing,” adding that many companies in Sweden are becoming increasingly aware of Taiwan’s open economy and investment potential. Additionally, Taiwan’s economic environment has proven beneficial to foreign investors, with its “advanced R&D capability and government incentives” as highlighted in the US Department of State’s 2021 Investment Climate Statements.

Economic ties between Sweden and Taiwan are likely to continue to grow, as more and more Swedish companies are choosing Taiwan as an ideal location to open their businesses. As Boye argued, Taiwan is “a fantastic place if you want to connect with the world,” pointing to the potential of Taiwan as a locus for trade and investment in the Indo-Pacific. He further stated that the Taiwanese economy is dynamic and conducive to Swedish companies seeking a “positive” and “safe” destination for sustainable investment.

To cement economic ties, Stockholm and Taipei have shared their business platforms, discussed the possibility of forging bilateral cooperation on semiconductor supply chains, and conducted business-to-business (B2B) trade meetings. Both sides also vowed to seek cooperation on transparency of tax information, recognition of laboratory operating data, and promotion of green technology and renewable energy. While Sweden has long been a leader in promoting renewable energy, president Tsai has also pledged to achieve net-zero carbon emissions by 2050. Hence, Sweden and Taiwan could strengthen cooperation in energy transition and sustainable economic development in the post-pandemic future.

Yet, some underlying hurdles are there to stay. For instance, business processes in Taiwan are more rigid than in many western countries, thereby increasing approval times and complicating transactions. Overly complex or formal business procedures and paperwork could cause unpleasant experiences for foreign companies, including Swedish ones. Boye underlined that the economic environment of Taiwan has been “super-impressive,” but argued that the Tsai administration should work harder to encourage more investment from Swedish firms, potentially by “making legislation more transparent.” In light of these issues, the two sides should work to reach harmonized standards and build a more business-friendly environment that could benefit both Swedish companies and Taiwan’s local businesses.

Conclusions

In general, Sweden and Taiwan have ample space for collaboration. For instance, both sides could further collaborate to strengthen global health security, which has become among the top priorities of both the Swedish government and the Tsai government. Last year, Taiwan shared with Sweden a “big medical data platform,” as well as its experience with telemedicine and health insurance. As smart healthcare has become increasingly crucial, Taiwan could benefit Sweden by sharing its experience of integrating big data with advanced medical treatments.

Taiwan and Sweden have been fully committed to “universal values of freedom and democracy” and have fostered relations in a wide range of fields, including climate change, gender equality, and countering disinformation. In doing so, the two countries could be seen as “like-minded partners,” as president Tsai said during a videoconference in this month.

In advancing ties with Taipei, Stockholm has prioritized common interests, such as democratic values and commitment to the rule of law. Under ongoing pressure from China, Sweden and Taiwan are expanding their diplomatic and economic ties, which will likely continue to flourish and form the core of an increasingly productive friendship. Sweden’s efforts to strengthen ties with Taiwan could create a domino effect in Europe, providing a model for European nations seeking to lessen their economic reliance on China and to partner more closely with Taiwan.

The main point: Against a backdrop of Chinese intimidation and pressure, Sweden and Taiwan have greatly expanded their diplomatic and economic partnership. While significant hurdles remain, the relationship could continue to expand in the future.

Huynh Tam Sang is an international relations lecturer at Ho Chi Minh City University of Social Sciences and Humanities, a research fellow at the Taiwan NextGen Foundation, and a nonresident WSD-Handa Fellow at the Pacific Forum.

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