New record year

Although Chinese economic growth has slowed down compared to previous years, the two researchers both point out that the level of growth in China is still much faster than in western countries, which may contribute to the increase in bilateral trade and investment. 

During the first half of 2017, the value of Finnish exports to China was 1.76 billion euros (2.07 billion U.S. dollars). The researchers predict that if the second half is as good, 2017 will be the record year in the value of Finnish exports to China. The value in 2016 was 2.85 billion euros. 

The writers believe Finland and China complement each other both in know-how and in resources. They note that the Chinese are interested in Finnish competence in ITC, clean tech and forest industry. The same applies to availability of forest raw material and the potential of making use of it.

Kotilainen and Kaitila have shown a vivid picture of how Finnish service exports and investments to China plummeted along with the negative development of the Nokia mobile phone production but have now recovered. In 2010, the value of Finnish service exports to China was at one billion euros, only followed by a fast decline. ETLA now concludes it was attributed to the sale of Nokia mobile phone production to Microsoft. Also, direct Finnish investments to China used to be four billion euros per annum, but plummeted to zero in four years.

Since 2014, Finnish exports of service have grown again, reaching 1.2 billion euros last year. The researchers include Chinese tourism to Finland as sales of services to China.

The researchers underline the importance of the subsidiaries of Finnish companies in China. “The role of subsidiaries is larger than that of exports,” they say.

Finnish subsidiaries in China comprises 12 percent of the turnover of Finnish subsidiaries abroad in 2011, but was reduced to a half when Nokia declined. In 2015, the figure recovered to 7.5 percent.