State of the Nations: Denmark and China challenges and opportunitiesBy ambassador Friis Arne Petersen

24.03.2015

1

Agenda

1. Danish-Chinese relationship– Increasing political interaction

2. Danish-Chinese trade and investments– Denmark as a player in the Chinese market– A great investor among the EU countries – Danish investments thrives

3. The future for Danish investments– The future of the Chinese politics and economy– Where are the opportunities for Denmark?

2

Increasing political interaction

3 2009 2010 2011 2012 2013 20140

5

10

15

20

25

2

4

2

21

15

20

Bilateral Government Agreements

2009 2010 2011 2012 2013 20140

2

4

6

8

10

12

14

16

18

5

15

2

15

11

17

Political high level visits in ChinaDanish cultural season in China

4

Danish trade surplus with China

Source: Danmarks Statistik, February 2015 (China incl. Hong Kong)

Danish companies and products do well in China

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

10

20

30

40

50

60

70

30.3

38.7 41.3

45.2

39.1

47.7 48

50.4 50.9

53.7

21.0

29.2 33.8

36.6

30.1

39.7 42.4

51.4

57.9 57.5

ImportExport

Billion DKK

Source: Eurostat , SITC&BOP, (China incl. Hong Kong and Macau), February 2015

5

Euro

Luxe

mbourg

Denmark

Irelan

d

German

y

Belgium

The N

etherl

ands

Swed

enMalt

a

Finlan

d UK

Austria

France

Slova

kia Italy

Czech Rep

ublic

Hungary

Slove

niaSp

ain

Bulgaria

Estonia

Greece

Cypru

s

Portuga

lLat

via

Poland

Lithuan

ia

Romania

Croati

a0

500

1000

1500

2000

2500

3000

3500

Services pr. capita

Goods pr. capita

Denmark is in the first league of trade with China in the EU

Export in goods and services pr. capita to China in 2013

Investments in China have grown

Source: Danmarks Statistik, FDI, november 2014 (China incl. Hong Kong)

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

10

20

30

40

50

60

70

7 8 9

1719

22

29

35

56

61

2 1 13 2 1 2 2 2 1

Danish investments in China Chinese investments in Denmark

6

Billion DKK

Investments to China pr. capita 2013 top in EU

Source: Eurostat, FDI, February 2015 (China incl. Hong Kong)

Danish companies are more dependent on trade and investments with China than other EU countries

7

Euro

Netherl

ands

Denmark

Belgium

German

y

Swed

enFra

nce

Irelan

d

Finlan

dIta

lySp

ain

Greece

Slove

nia

Czech Rep

ublic

Hungary

Estonia

Lithuan

ia

Poland

Cypru

s

Bulgaria

0

500

1000

1500

2000

2500

3000

Positive outlook for Investments

8

18%

70%

8%

1%

3%

Very favourable

Favourable

Unfavourable

Very unfavourable

Don't know

How do you perceive the Chinese marked?Does your company plan further investments in China over the next 2 years?

13%

58%

23%

6%

Major increase

Moderate increase

Maintain present level

Moderate reduction

Major reduction

Don’t know

Economic case: Historically

9

Source: IMF – World Economic Outlook, October 2014, (Estimates from 2013)

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

-8

-3

2

7

12

17

China Denmark USA

Pct. growth

China will be the world’s largest economy

10

Source: IMF – World Economic Outlook, October 2014, China incl. Hong Kong

By some accounts, the Chinese economy is already the world’s largest

United States

China India Japan Germany Russia Brazil United Kingdom

France Mexico0

5000

10000

15000

20000

25000

30000

2013 2019

Billion USD (PPP)

What the future brings for China

2015: NPC/CPPCC

• The ”new normal”• Reform of the SOE’s • Anti-graft campaign• Rural area and agriculture• ”Go global” strategy • Pollution

2016-2020: The 13th five year plan

• Deepening reforms• Corruption and rule of law• Rural area and agriculture• Opening up of China • The environment and pollution

11

China’s reform program match Danish know-how

12

Environmental protection

Sustainable energy

Sustainable urbanisation

Shanghai Free Trade Zone and new FTZ’s.

Trade liberalisation

Anti-corruption

Middle income illnesses

Demographic shifts/aging

Green tech

Energy solutions

Architecture/constructions

Blue Denmark

Competitive SME’s

Leader in transparency

Cutting edge pharmacy

Welfare knowledge

China’s wishes and reform program Danish know-how

Why?

• China is Denmark’s second biggest trading partner outside Europe in 2014. • Three new growth advisors at the Danish Embassy. • Increased cooperation between authorities in Denmark and China creates opportunities.

Political access enhances the chance of success for Danish companies in the Chinese market.

Increased commercial activity enhances political access.

What is all the fuss about?

13

Relations at an “all-time high”

2008: Comprehensive strategic partnership

• Strengthening political dialogue• Climate, energy and environment • Research and innovation• Food safety and production methods

2015 the next chapter: The 65th anniversary of diplomatic relations

• The embassy is investigating new corporation areas• The political climate have an effect on the economic

relationship• The future looks bright for Danish investments in China

14