But as a winter sports nation, Finnish companies and the community don’t need much encouragement to get into the Winter Olympics spirit, do we? Naturally, with the theme of Together for a Shared Future, it’s also great to see our Sports Minister Antti Kurvinen attending the Olympics. A delegation of 400 Finns will travel to Beijing 2022 Winter Olympics with strong prospects for Olympic medals!!

The Winter Olympics coincides with China’s biggest holiday season, the Spring Festival. Starting from February 1st, practically the whole of China is on holiday. The 7-day festival is once again causing a 40-day travel season, as many Chinese head to their home cities and combine the holiday with their annual leaves. This is the world's largest annual human migration and over 1,18 billion trips are expected to be made during this time. It's estimated that this year there will be 35.6% more trips than the year before, but this is still 60.4% less than before the pandemic. Due to the Olympics Beijing is under special restrictions, and returning to Beijing from elsewhere requires two covid tests instead of one. The new 72+48 -rule will be effective till the end of March, so there will definitely be less travel to and from Beijing - and more time to watch the Olympic games.

Last December, China unveiled its 14th Five-Year Plan for Promoting the Development of Small and Medium sized Enterprises. The document sets out to establish a pathway for 2025 that ensures an improvement in the overall development quality of SMEs, their innovation capability and specialisation level, as well as their operation and management levels. Major targets mapped out by the plan include: increasing the per capita operating income of SMEs by over 18%, increasing the annual R&D expenditure of small industrial enterprises by over 10%, and achieving an average annual growth rate of over 10% in the number of patent applications by the end of 2025. That is a welcome focus as the majority of new Finnish companies entering the market are SMEs.

To better understand how Finnish companies are doing in this turbulent business environment, we conduct an annual Business Confidence Survey together with other Finnish Business Councils in mainland China and FinnCham in Hong Kong. This year part of the survey has been formulated together with the Finland Ministry of Economic Affairs and Employment. Results will be published in March and everyone will be invited to hear them online. If you haven’t received the questionnaire yet, we invite you to take the survey in the link below. The survey is meant for all Finnish businesses operating in China and will take 10-15 minutes to complete.

The survey link above will be open until February 20.

For businesses, the new year will properly kick off after the Chinese New Year. That is, after the Spring Festival. It will be the year of the Tiger. The tiger is known as the king of all beasts in China and is associated with bravery, confidence and strength. We have great confidence in the future of Finnish businesses here in China. Photo above is from our FBCB Annual Epiphany brunch, our every-year-tradition in January between Western and Chinese New Year.

In this month's guest writer Johann Annell, Partner of Asia Perspective, shares his interesting insights of being a foreign businessman in China.

On the behalf of FBCB I wish you all Happy Chinese New Year!

Ulla Nurmenniemi

Executive Director

Finnish Business Council Beijing

Our company, Asia Perspective, is not new, but has actually been around since it was founded in 2011 in Shanghai and have over the years served many large and small Finnish companies in Asia and also have an office in Helsinki. I personally am however new to the Finnish business community in Beijing and have got the pleasure recent months of getting to know many of you.

We are a lucky minority having the experience of seeing China from the inside these special times, as many who should have been here as students, tourists, business travelers and expatriates are not able to come. I do however feel “welcome in China”, at a time when many may not feel the same way. As often in China, and life in general, you do need to keep several seemingly conflicting thoughts at the same time. While the world speaks of decoupling, the physical flow of goods is impacted by shipping crisis and the mental distance grows to a mysterious China that few have seen the past two years, business in many ways rolls on and grows. Being a foreign entrepreneur in China gives me direct view on how China is continuing to encourage growth of foreign businesses, with administrative procedures that are by now quite digitalized and bearable, plenty of opportunities for matchmaking and exposure to local business partners, and initiatives to offer streamlined innovative environments such as Zhongguancun for international entrepreneurship. Also, when procedures are not so smooth, such as in setting up new bank accounts, I have been positively surprised by how helpful and patient office workers have been in “exception handling”, when I as an “edge case” walks in, working through the lunch break and figuring out ways to manage IT-systems and processes that are complicated even for Chinese citizens. Beneath the professional demeanor, I often also found a great interpersonal warmth and curiosity that makes daily life nicer, I will never forget when I had just finished a bureaucratic procedure and the civil servant behind the glass asks me “I am so curious, I have to take opportunity to ask now when I have a Chinese-speaking foreigner in front of me, ‘what do people in your country really think of China?’”, to which I could mainly answer “Most have never been here, and don’t know much about what it is like in China”.

Now we look forward to athletes and visitors feeling welcome to China when arriving in a few days for a very unique Olympics. The city is getting ready, with displays of the Olympic mascots and a sense of anticipation in the air. Even though it will be a very limited part of China that the visitors will see, it will still give the world a lot of impressions of China from a different angle than usual when the focus for a few weeks will be on sports and on the experiences of a large contingent of visitors focused on delivering extraordinary achievements during extraordinary circumstances. I hope this event, when we in a few years look back will be remembered as a great sports event, and also as a symbolic turning point after which the situation started to improve for travel, business and overall exchange.

In economics, we speak about “animal spirits”, and trying to understand how people think and act in response to “external shocks” is a great part of trying to be a step ahead in planning for future business. We have seen the pandemic shift demand towards physical goods instead of services, contributing together with supply chains that operate at restricted capacity to a very challenging situation for logistics. We now also see that inflation is truly picking up as a result of more money chasing fewer goods, with the Euro area now hitting a 5% rise in consumer prices and producer prices rising at an all time high pace. Unfortunately, the risks are great of that this situation will persist and get worse before it gets better. Inflation going from a peripheral concern to an issue that becomes a major factor in consumer and business decisions the coming years will negatively impact the real wealth production by the economy as price signals become mixed up. I also see the trend of shifting focus in the economy, where there is still tremendous value to be created from further digitalizing society, the recent year have seen the pendulum start to shift towards more focus on the basics of food and energy as areas of investment and innovation.

Recent years, we have seen steadily rising share of capital expenditure going into software, software has been proclaimed to be “eating the world” and the stock markets have been dominated by huge software-centric firms. Now the physical limits of our production systems are being felt, and the world is picking up momentum in transitioning towards global carbon neutrality, that will mean enormous capital investments and change in systems. Economics being a driving force of history, we can already now envision much of what will happen as energy production and food production systems transform and populations age, with great fortunes being made by those who can speed up this process and in doing so create foundations for new prosperity by more resilient sustainable production of the basics. Drawing parallels to 2000 years ago, there was already significant global trade, with trade from the Han-dynasty reaching Rome via the silk road, letting Chinese enjoy exotic goods such as amber and Romans enjoy garments made of Silk. Still, the economy was mainly regional, with grain shipped around the Mediterranean being a primary concern of the Roman empire and the Chinese administrators likewise mainly concerned with food. Then, through periods of prosperity, the share of globally traded goods and the ideas following merchants have increased, and periodically waned, but never before has there been such a globally shared challenge such as climate change and energy transition that necessitate millions of economic actors changing in such short time to diffuse technical innovations and make large capital investments. What is encouraging is that the technology already exists, the challenge is in economics and management to roll out great change in the most efficient way.

We are about to enter the year of the Tiger, an animal with associations to bravery and strength, and also to being a lone hunter and representing danger. I look much forward to this year with the Finnish Business Council, and being part of learning and contributing to what will be a year of great changes and new beginnings in China. I also look forward to a great start of the year, with Nordic athletes showing what we are famous for, lifestyles with much exercise, close to nature in cold climate with great team fighting spirit!

Author:

Johann Annell

Partner, Asia Perspective

Finnish Business Council Beijing is part of Team Finland in China, and an outstanding platform for all Finnish businesses in China. For those companies which need more visibility, we have launched a Premium Membership. It's an upgrade from normal membership, as you can see from the table below.

For those companies in Finland, who are planning to expand their businesses to China, or are in the early stage and don't have an office in China yet, we have a distant membership. It's called Proxy Membership. A very cost-effective way to make your company known to a large audience, and get essential contacts for your future.

See all membership options HERE

The Premier Health Insurance Program of the FBC is provided exclusively for company members of Finnish Business Councils. Program is run by experienced international insurance broker – Oriental Benefit Group. The program offers companies with a comprehensive coverage and affordable rates. You can get the group insurance rates even if there's only one person in the company.

Who can join the Chamber’s Premier Health Insurance Plan?

Members of FBC

Contact us for more information. FBC Representative at Oriental Benefit Group:

Zikai Liu, Managing Partner

Mobile: 18501718500

Email: zikai.liu@orientalbenefit.com