The U.S. Looks to Sweden to Confront China’s European Influence

Written by: Audrey McGrory

The 1962 signing of the Helsinki Treaty may be considered a mere formality. For decades, the four Nordic countries—Denmark, Finland, Norway and Sweden—have been linked by their intertwined histories and shared values, allowing them to enjoy a close economic and diplomatic relationship well into the present. The similarities between the Nordic countries span well beyond cultural norms into their foreign policies, which have mirrored one another for decades. 

Historically, each Nordic country has maintained policies that prioritize cooperation, balancing relations in the West with those in the East, particularly Russia, which shares a land border with Sweden, Finland and Norway and a territorial border with Denmark in Greenland. As the war in Ukraine has unfolded, the policies of the Nordic countries have shifted from emphasizing cooperation to active defense—a change most clearly marked by Sweden and Finland’s application to the North Atlantic Treaty Organization (N.A.T.O.). While significant, Sweden and Finland’s applications to N.A.T.O. offer only one example of a shift occurring in Nordic foreign policy, especially Swedish foreign policy. 

Over the last decade, China has made a concerted effort to expand its presence in Europe, establishing particularly strong economic ties that have made the European Union (E.U.) its largest trading partner. From 2008 to 2017, China’s annual foreign direct investment (F.D.I.) in the E.U. increased from $42 billion to $840 billion—a result of its acquisition of European companies and investment into a variety of industrial sectors. Despite the impressive growth, China’s F.D.I. in the E.U. has declined since 2017, yet not as a result of tougher E.U. policies. Instead, the Chinese government has changed its European economic policy, shifting towards more “consumer-facing” sectors, placing controls on private capital outflows, and selling a bulk of its European assets. While more restrictive E.U. policies have contributed to the decline, they hardly mirror the policies of Sweden, which has adopted a Chinese policy that closely aligns with the U.S. While the Nordic countries’ relations with Russia have been of particular focus in recent months, the crumbling relationship between the Nordic countries, particularly Sweden, and its relationship with China requires attention.

In recent years, the Nordic countries have participated in high-level meetings with Chinese officials, leading to the signing of a new Memorandums of Understanding, which sought to expand bilateral cooperation, attract Chinese investment, and facilitate multilateral initiatives. Initially, Nordic efforts to bolster economic ties with China had been successful, and in 2018, Sweden became the second-largest European recipient of Chinese foreign direct investment (FDI) behind the United Kingdom. Despite the initial success, a fortified Nordic-Chinese relationship was only temporary. 

Doubts about cooperation between China and Sweden came to the fore after the 2015 disappearance of the Swedish Hong Kong-based book publisher, Gui Minhai. Gui Minhai, who had obtained Swedish citizenship after the Tiananmen Square massacre in 1989, had been an outspoken critic of Chinese President Xi Jinping. Publishing books that were tabloid-esque and often described as “gossip,” Minhai’s unflattering portrayal of the Chinese government made him a target for the regime. In 2015, while vacationing in Thailand, Minhai mysteriously disappeared, only to reappear in a Chinese detention camp months later. In what has been considered a forced confession, Minhai explained his arrest as the result of his involvement in a fatal car accident—a claim rejected by supporters, especially those in Sweden, where his case garnered significant media attention. Swedish Foreign Minister Ann Linde declared that Sweden would use “all diplomatic tools” to ensure Minhai’s return, and summoned the Chinese ambassador to Sweden to “reiterate our demand that Gui Minhai be immediately released.” The diplomatic tensions, exacerbated by Minhai’s detention, transcended into Swedish public opinion of China, which dipped significantly after 2015 and remains particularly low compared to other European countries. More recent actions highlight the hostile shift of Sweden’s Chinese policy and wider Nordic policy.

In 2020, the Swedish telecom regulator, PTS banned the Chinese technology company, Huawei from selling 5G equipment in the country—a decision that Huawei unsuccessfully challenged in Swedish court. The ban was prompted by American claims that China planned to use the equipment for espionage, leading many European countries to regulate the use of Huawei equipment in their own jurisdictions. Swedish authorities later banned ZTE, another Chinese technology company, from selling its equipment in the country. 

China’s growing presence in Sweden, including its direct investment into major Swedish companies, such as Volvo, has led Sweden’s security service, SÄPO, to label China “the biggest threat to the country’s national security after Russia.” A 2019 report expands upon the concerns, claiming that Sweden resided in the “Chinese sphere of influence” and was the target of Chinese efforts to gain “intelligence about technological developments in various sectors, [its] operational capabilities and defence plannings.” The SÄPO has also pointed to Chinese efforts to influence the Swedish political sphere, using Swedish politicians and media to reshape “basic freedoms and rights in Sweden.” In one of its most forward declarations of hostility towards China, Sweden named China, along with Iran and Russia, a “hostile [state that targets] everything from our constitutional rights and freedoms to our economic prosperity, political decision-making and territorial sovereignty.” 

Finland’s state security service has also raised concerns about the “potential threat from China against [its] critical infrastructure”—a detour from its 2016 policy, which proclaimed to “avoid any future damage to bilateral relations.” Denmark, in particular, has been particularly quick to act. It was the first among Nordic countries to raise concerns about the national security threat posed by China through its European 5G roll-out, compounding American rhetoric that Huawei equipment could be used for espionage. Sweden’s persistent hostility towards China makes it unique—even among its Nordic partners, which have sought to couple hostile rhetoric with lukewarm policies. The breakdown in Swedish-Chinese relations offers an interesting insight into Swedish-American relations, revealing trends not mirrored in other European countries, which have increasingly questioned their relationship with the U.S. 

Swedish favorability of the U.S. has increased significantly over the 21st century. In 2007, 46% of Swedes had a favorable view of the U.S.—a low figure only rivaled by 31% in 2020. Yet, in 2022, 66% of Swedes viewed the U.S. in favorable terms, nearly surpassing the highest rating of 69% from 2016. 84% of Swedes viewed the U.S. as a reliable partner and 74% of Swedes had confidence in President Joe Biden to do the right thing in world affairs—the third-highest and second-highest of the countries polled respectively. The U.S.’ increasing favorability in Swedish public opinion and the deepening of Swedish-American relations contrasts with other European countries, especially in recent months.

In 2021, interactions between then-U.K. Foreign Secretary Liz Truss and U.S. Secretary of State Antony Blinken concerned U.S. officials, who found her questioning the “special relationship” between the two countries. Germany has challenged U.S. policy regarding Ukraine and recently criticized the U.S. for selling natural gas at expensive prices—a concern also expressed by French President Emmanuel Macron. While France has historically practiced a degree of caution in its relations with the U.S., the emergence of the A.U.K.U.S. security pact, which blindsided France in its own pact to sell nuclear-powered submarines to Australia, seemed to give legitimacy to France’s cautious position. Despite presenting a united front, the Russian invasion of Ukraine has brought to light the distrust of the U.S., particularly American intelligence, by European nations—a concerning development for the U.S., as China seeks to expand its influence in the continent. In contrast, Sweden’s stance reveals the possibility that a U.S.-aligned European response to China could emerge.

Sweden has been called a “bellwether” for E.U.-Chinese policy. In 2019, Sweden urged the European Union to adopt policies that aimed to thwart China’s growing influence in Europe. The Swedish effort has been productive, and since 2019, the E.U. has dramatically shifted its diplomatic and economic policy towards China. A defining moment in E.U.-Chinese relations was the 2019 release of the “Strategic Outlook” report by the European Commission, the E.U.’s executive body, which named China  a “systemic rival promoting alternative models of governance” and “an economic competitor in pursuit of technological leadership.” Since the report’s release, the E.U. has displayed greater antagonism towards China, adopting more hostile policies, including the recent introduction of a proposal to place a limited import ban on Chinese products. In October, the European Commission President Ursula von der Leyen spoke out after Xi Jinping’s re-election by the Communist Party of China, reasserting that China’s system is “completely different than ours and we are aware of the nature of the rivalry.” Previously, she had announced a “Defense of Democracy” package, criticizing Chinese funding of European research institutions and expressing hope that the package would “scrutinize foreign funding of European academic institutions in order to ‘bring covert influence and shady funding to light.’” The antagonistic shift by the European Union is palpable in both rhetoric and policy, and Sweden’s efforts to hasten the shift reveal a notable, yet understated aspect of the change. Sweden’s surprising influence in E.U-Chinese policy relations could continue to reshape the E.U. position, bringing stronger American influence into a new era of European relations. 

While the U.S. might sense its influence on European policies weakening and China’s influence strengthening, it should see hope in the policies of the Nordic countries, particularly Sweden, which have proved influential in shaping E.U.-Chinese policy. Although European countries have sought to become less dependent on the U.S. and expressed a degree of cautiousness in its relations with the country, the deepening relationship between Sweden and the U.S. should also give hope to the latter as it seeks to reassert its competitiveness in Europe. In gauging the global influence of China, the policies of Sweden and its Nordic partners could provide insight into what the future might hold.  

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s