China-Sweden relation

🪨 China pushes back on Sweden's green ambition

It’s no secret that Sweden is striving to be an integral player in the green movement, with the relatively young Swedish company Northvolt looking to expand its green battery production in the coming years. At the same time, Scania has announced plans for a new factory in Södertälje and Volvo AB made its intention to break into the battery production industry with the establishment of a new plant in Mariestad.

China in the way?

But ramping up production may prove to be more difficult than these Swedish companies anticipated. The battery production process is highly demanding in terms of resources, requiring dozens of different metals and minerals—mostly aluminum, nickel, and graphite—primarily sourced from China.

Declining exports

Despite the projected growth of battery production in Sweden, China’s exports of metals and other necessary materials have actually decreased in recent years, and this reduction seems to be intentional. There is no formal ban on exporting to Sweden, but one Chinese export has reported being “informed by the authorities that export licenses to Sweden are no longer issued."

Motive?

Some point to Sweden and China’s sour relations as a motive behind why the Chinese government might be trying to sabotage Sweden’s battery production. But another reason? Business.

China holds a firm grip on the worldwide battery market and exhibits hesitance when it comes to relinquishing its market share. Political factors are also at play. Beijing often uses trade as a political tool, what researchers call “weaponized interdependence.”

So Swedish leaders are tasked with what to make of this situation and how to move forward.

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