China Speed VS Sweden Made

Pei Wenguo has never experienced the rainy season in southern China. The native northeast man, who spent 25 years in Sweden in northern Europe, arrived in Shanghai early this year as the president of SSAB, Asia Pacific, a Swedish steel company.

On May 23rd, at the lively ceremony of World Expo National Pavilion Day in Sweden, Pei Wenguo had the first opportunity to shake hands with Swedish king Carle sixteen Gustaf. Along with the king, there are also CEO of many Swedish enterprises such as Volvo. The acquisition of Volvo by international Geely, a Chinese private enterprise, is a major event in recent Sino Swiss business circles.

Confident "made in Sweden"

Pei Wenguo's return to China stems from SSAB's decision to establish a production line in Kunshan. SSAB mainly produces high performance steel, mainly used in construction machinery and heavy transport equipment. The factory is built in Sweden and the United States. In the past, when Chinese customers placed orders, they shipped them all over the sea.

In recent years, China's demand for machinery and equipment has increased dramatically, but goods are shipped to China from factories in Europe and America. They have to walk for 6 weeks at sea. They also have to go through complicated customs formalities. Freight and tariff are not mentioned. Long shipment is the biggest trouble. Usually, Chinese customers must wait for 4 months after placing orders. Customers can only advance orders and stockpiling, resulting in backlog and inventory management problems.

Today, SSAB's first production line, which is invested by 300 million yuan in Kunshan, Jiangsu, is under construction. It plans to start production next year. Pei Wenguo, who holds a doctorate degree in metallurgical industry from the Swedish Royal Institute of technology, has naturally become an ideal candidate for the head of Chinese companies.

The production line of SSAB in Kunshan can not complete the whole process. They transported the semi-finished products to Kunshan and finished the final process, thus reducing the shipment period from 4 months to 3 weeks.

In addition to adapting to the rainy season in the south of the Yangtze River and the inconvenience of working hours of communication with the Swedish headquarters for six or seven hours, China's iron and steel production capacity is surplus. How to deal with China's strict government regulation and control policy is one of the biggest issues facing Pei Wenguo.

SSAB provides energy-efficient steel roofs and walls for the Swedish Pavilion in World Expo, Shanghai, which can save 15% of energy consumption.

Under the roof of the conference room on the third floor of the Swedish Pavilion, Pei Wenguo needs to constantly explain to his Chinese compatriots that the high cost of high-performance steel can not be compared with ordinary products, which often question the price of SSAB products too expensive.

Pei Wenguo Sweden's colleague and chief executive officer of SSAB Olof Faxander said two new Swedish companies enter the Chinese market every week. Prior to that, Ericsson, Tetra Pak, H&M, IKEA, AstraZeneca and other Swedish enterprises have become a strong force in the Chinese market. Similar to SSAB, they have great advantages in technology and creativity, and are usually more confident when facing Chinese counterparts and business partners.

Swedes look at "China speed"

Pei Wenguo once introduced SSAB Kunshan factory in the conference room on the third floor of the Swedish Pavilion. Martin was a member of the audience. He was a journalist from a Swedish financial news agency.

Martin, who has been immersed in Swedish business for a long time, has felt a completely different corporate culture because he interviewed World Expo to come to China. He said that the people of Sweden were calm and had problems, and they sat down to discuss and compromise. Finally, both sides agreed that the two sides considered a fair plan.

"The ambitious Chinese people are a little nervous." Martin said. He felt that the Swedish enterprises that first came to China were not worried about competitors from other countries, but that young and energetic Chinese entrepreneurs and a rapidly changing market atmosphere gave the Swedes a lot of pressure.

"In Stockholm, people are constantly talking about how strong Chinese competitors are." Martin said.

After the news of Geely's acquisition of Volvo, both Chinese and Swedes have found strong complementarity: Sweden needs China's strong growth momentum and China needs Swedish style innovation. For Volvo, Li Shufu once openly said, "I love you" in public.

In April this year, vice president Xi Jinping visited Stockholm, and the two sides signed an agreement on economic and cultural cooperation worth 20 billion yuan. This time, the Swedish Prime Minister and vice premier of the government first went to Beijing to meet with President Hu Jintao, and then came to Shanghai to attend the national day of Sweden.

It is interesting to note that after watching the China Pavilion and the Swedish Pavilion, in May 24th, the Swedish King appeared in the joint venture Hall of China's private enterprises. CEO, a major Swedish company, was accompanied by Guo Guangchang, chairman and partner of the Fosun Group.

CEO, a Swedish firm, did not hide the impact of "China speed". He also worried that it would be difficult for Swedish enterprises in China to retain excellent Chinese talents. They were industrious and ambitious. "But many people seem to want to start their own businesses and make big money."

Volvo's CEO Leif Johansson also came. He said that China has become the local market of Volvo. But he reminded Chinese counterparts that the pace of China's economic development should gradually slow down, because "too fast growth will fall even more ruthlessly".

Pei Wenguo was unable to take part in this special round table because of his busy business. However, he was equally concerned about how China could maintain more efficient and quality growth.

Perhaps, as his Swedish counterparts suggested, as a big manufacturing country, China must enhance the location of its products in the value chain and own more patents and intellectual property rights. In this respect, the "slower and more sophisticated" Swedish enterprises are an example.