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China to offer loans worth 1 billion euros to Swedish firms

By Zhao Qian (Global Times)

07:01, May 31, 2012

The Chinese government has signed an agreement with Sweden to provide loans worth 1 billion euros ($1.25 billion) to small- and medium-sized enterprises (SMEs) in the country, a Chinese official told the Global Times yesterday, a step that analysts believe will offer win-win cooperation.

China Development Bank (CDB) signed the deal with Sweden on bilateral scientific research and innovation development cooperation, but further details including how to use the loans and what the rate will be have not yet been decided, Jin Jun, a diplomat with the Economic and Commercial Counselor's Office of the Embassy of China in the Kingdom of Sweden, told the Global Times.

Chinese Premier Wen Jiabao said during his April visit to Sweden that China planned to invest about 1 billion euros in the country.

"Sweden's economy is performing better than some other European economies, so the financial risks will be fewer for the CDB in offering loans to the country," Wang Tianlong, an associate researcher at the Consulting Research Department of China Center for International Economic Exchanges, a government think tank, told the Global Times yesterday.

Most of the European countries' banking systems have run into difficulties amid the debt crisis, Wang noted, and the CDB's move will provide support for Sweden's economy.

Despite relatively strong growth and a declining unemployment rate, Sweden still faces risks given its heavy dependence on exports to other European economies and its large financial sector, according to a report by the International Monetary Fund on May 15.

But Sweden still has advantages in areas such as advanced clean energy technologies, environmental protection and sustainable development, which could be the main areas of cooperation between the two countries, according to Jin.

The total value of Sweden's exports in April this year amounted to SEK 96.2 billion ($13.37 billion), down by 2 percent year-on-year, according to data from Statistics Sweden's website.

Meanwhile, its imports in April were valued at SEK 91.5 billion, down 4 percent compared with the same period of the previous year, the data showed.

"Sweden has had good economic and trade relations with China in recent decades. Sweden's enterprises are eager to look for Chinese partners and to invest in China, especially at a time when Europe is suffering economic troubles," Jin noted. Around 10,000 Swedish companies had business relationships in China and 500 Swedish enterprises had set up offices or branches in China by the end of 2011, according to Statistics Sweden.

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