As Swedish companies move more aggressively into China, they are treating Hong Kong increasingly as a base for Asia-wide operations rather than a simple platform into the mainland. 'Hong Kong is now serving a different role,' said Swedish Chamber of Commerce chairman Thomas Lagerqvist. 'Many companies have relocated into China, so Hong Kong is no longer the traditional springboard into the country that it used to be. However, even as they are moving operations into China, they are maintaining a headquarters in Hong Kong or returning to establish a regional headquarters here. This often includes Asia or the entire Asia Pacific.' As China continues to open up, it is becoming increasingly easier to do business there. Swedish companies are consequently growing their business operations in the mainland. 'Five or 10 years ago, Swedish companies tended to conduct their Chinese operations from Hong Kong. China is developing so rapidly, and it's getting easier and easier to do business in China. So there will continue to be an influx of companies,' Mr Lagerqvist said. But that does not mean that Hong Kong won't continue to have an important role to play. The city has at least a 10- to 15-year jump on such mainland competitors as Shanghai and Guangzhou. 'Internationalism is the differentiating factor,' said Mr Lagerqvist. 'Hong Kong's economy is internationally oriented. It is an international centre for finance and business. 'It is internationally recognised and well established because of its legal traditions, transaction documents and procedures.' Other important factors include a convertible currency, the rule of law, a corruption-free environment, an excellent service infrastructure, good access to a pool of skilled employees, little local protectionism, a free flow of currency, reliable financial advisers and intermediaries and a good understanding of financial institutions. 'Hong Kong is looked upon quite favourably in Sweden. Some would say that it is China's financial and business centre. It's got a good standing. It's seen as an easy place to set up and do business,' Mr Lagerqvist said. Sweden's trade ties with China go back to the 17th century. As the first western country to establish diplomatic ties with communist China, it is recognised for its 'non-exploitative' trade policies. Key industries include cars, machinery and parts, pharmaceuticals, kitchenware and household appliances, and packaging materials. 'Sweden is known for its hi-tech industries,' Mr Lagerqvist said. 'It is recognised for its hi-tech content, with a solid reputation as a provider of high technology and reliable technology.' Swedish companies are bullish on Hong Kong. According to a survey conducted by the Swedish Chamber of Commerce, 57 per cent of Swedish companies with operations in Hong Kong expect their future performance to be 'good' or 'very good'. The rest say 'satisfactory', and no companies say 'poor'. This is a marked improvement on two years earlier, when 9 per cent rated expectations for the future as 'poor'. Brian Tuson, chief executive, Ikea division, Hong Kong and Taiwan, said: 'This year we've achieved higher sales levels than we ever have before in Hong Kong. 'That's because the economic recovery has been very strong, and the property market has been a significant factor.' Mr Tuson expected the trend to continue. 'I think we're going to see it continue for the second half of the year. Ikea operates in 21 countries around the world. Asia accounts for just 3 per cent [of turnover]. 'In terms of future growth, however, Asia is seen as having Ikea's largest growth potential, followed by Russia and the other former Soviet states.'
