China is everywhere. Chinese tourists travel to every part of the world, Chinese companies are all over the globe, and there are significant Chinese investments in various kinds of international businesses.
Finnish Lapland is no exception, as the Arctic region is also of interest to China.
– China’s interest in the Arctic region is a part of its globalization process. The central government and local governments support the internationalization of Chinese companies, says Matti Nojonen, Professor of Chinese Society, Culture and Economy at the University of Lapland.
According to Nojonen, China is interested in the Northeast Passage, arctic technology, natural resources of the area, sustainable development and the use of these resources in Finnish Lapland. Nojonen points out that the competition in the area is tough, Finland’s neighbours are strong competitors. He advises that we should not count on the Chinese sweet talk about how special Finland is to them and how our early diplomatic relationship is significant.
– Our neighbour and competitor, Sweden, was the first western country to establish diplomatic relationship with China. China is not only interested in Finland and Finnish skills, but we have good arctic skills, and therefore that is what we should offer the Chinese, Nojonen says.
Sustainable development and environmental issues have become important in China, because the state of the environment has deteriorated simultaneously with the development of Chinese economy.
– In environmental issues, the question is not only about companies and legislation, but also about administration and the educational standard of the people. In Finland, companies were strongly against environmental regulations in the 1970’s, but now the environmental aspect is a business strength for them, Nojonen says.
Advice and guidance in the development of rural areas
According to Nojonen, the field which might also interest China is the development of rural areas. This includes social and health services for elderly people and education in remote parts of the country. Finnish Lapland has a lot of rural, isolated areas, along with the relevant knowledge.
Nojonen points out that a large part of the Chinese population lives in the hinterland.
– 80 percent of the Chinese population live in the coastal areas and river deltas, and these are very populated parts of the country. The rest of the population, which also accounts for a huge amount of people, live in urban areas. And the Chinese population is aging rapidly, Nojonen tells us.
Does China have a special strategy for the Arctic? No one knows for sure, Nojonen says. The People’s Republic of China has not published an Arctic strategy, though many have tried to disclose one.
– The structure of the state of China is such that these strategies will never be published. The importance of Finland for China is illustrated in the fact that the President of China, Xi Jinping, recently visited Finland on his way to the US, Nojonen says.
Stable political environment
President Xi Jinping’s visit to Finland was, according to Nojonen, made to honour the 100 years of Finland’s independence, but also because Finland is a politically easy companion for China.
– Finland has not said anything against China, our relations are stable and predictable. The president of China paid us a visit because Finland is not going to raise any difficult issues.
Relationships between states are especially important to the Chinese, Nojonen says. In 2013, the Nobel peace prize was given to Chinese activist Liu Xiaobo and because of this, the business relations between China and Norway practically stopped for many years.
China has changed as its economy has developed. Nojonen says, that China is no longer simply a target for investments, but also an active business partner. And when China acts, the volume of business deals can be huge.
Cooperation with China has great potential, but Nojonen points out that one should not be naive with the Chinese. China is a very large country, and there is more than just one Chinese culture. China has a vast amount of different cultures and languages. The developmental differences between regions are immense, and the values between generations also differ.
– The Chinese can talk about their market area containing 1.3 billion people, and the Finnish businessmen get really excited. But China is not a one, huge, unified market area for almost any product, Nojonen says.
Doing business with the Chinese
Nojonen gives extremely important advice for companies, telling them to frame their businesses very clearly when working with the Chinese. China is in the middle of an economic boom and in this kind of situation, companies often expand their businesses beyond their core competence.
Nojonen advises Finns to do their homework well. The product that companies are selling to the Chinese has to be clear. One should not just go to China and wonder what could be sold there. There are risks in expanding one’s business outside your core competence, and that risk also exists when building co-operation with the Chinese in Lapland.
– During the negotiations it is possible for the Chinese to bring up something other than what was initially in negotiation. And then the Finns get excited about extra deals and the volume that the deal might bring. Losing focus and resource control can become a problem in both China and Finland. Of course, this kind of business is possible, but one should be aware of the risks.
A new kind of cooperation
Finnish and Chinese business cultures are different, Nojonen tells us. The Chinese are slow when making decisions, but when the decision is final, things will move quickly and and we will be dealing in massive quantities.
– The Chinese think that we Finns are stiff and cautious, and they think that we have a problem with quantity. When we are aware of these difficulties, we are already on solid ground.
Nojonen says that the huge difference in scale between China and Finland should be taken into account. Successful cooperation for Finnish companies with China requires a different logic, and this means developing a new networking method. Nojonen mentions tourism as an example.
– With the Chinese, the volume of tourists can be tremendous, and the Finnish tourism companies are small. If capacity becomes a problem, it should be possible to get help from other companies. It is ultimately essential to contemplate as a whole, whether we want to target either quality or quantity. There are pros and cons in both, Nojonen says.