Helsinki (07.12.2003 - Juhani Artto) In the last few months China has hit the headlines in Finland as a threat to the employment of Finnish workers. This concern is not without foundation, as industrial jobs have been transferred to China and many investments that create new jobs, including those demanding higher qualifications, have favoured China over Finland. The media has dubbed this the "China phenomenon" or "new China syndrome".
Nowadays the trend is no longer documented merely in the news, but also in broader examinations of current affairs and in efforts to analyse how Finland should respond to the China phenomenon. Business community representatives have been quick to cite the China phenomenon as a new argument in support of their familiar calls for greater labour flexibility and lower labour costs.
Finland's trade unions have yet to take an active role in the new debate on the China phenomenon. They have mainly chosen merely to highlight the lack of trade union freedoms in China, with all of the negative repercussions of this for the working conditions of Chinese labour and its lack of fairness in global competition. Even when considering this burning issue, however, the Finnish unions have kept a fairly low profile.
In contrast with some other Western countries, and especially with the USA, demands by union organisations in Finland to counter China phenomenon job losses by erecting protectionist barriers again have been conspicuous by their absence.
One major reason for this relaxed attitude in Finland's union movement lies in an emerging understanding of the corollary of the China phenomenon. The Finns have been well placed to grasp this aspect thanks to the example offered by Nokia, the flagship of Finnish industry, and its major subcontractors. It has required no great insight to understand that Nokia would not succeed globally if its production and research were confined to Finland. On the contrary, educated Finns are more likely to express amazement and gratitude on learning that roughly half of Nokia's 50,000 employees still work in Finland. As the global market leader in mobile telephones Nokia must, for obvious reasons, maintain production plants in China and in several other countries around the globe. It follows from this that its major subcontractors, such as Elcoteq and Perlos, both of which are based in Finland, must also have factories in China and in other locations where Nokia manufactures mobile telephones.
Perlos CEO Timo Leinilä recently pointed out that Perlos would not be able to employ some 2,000 people in Finland unless it also had another 2,000 employees in China and other locations where its major customers have based their production facilities.
Over the last few decades the pulp and paper industry, another pillar of the Finnish economy, has expanded its production more abroad than in Finland. Since this tendency began to emerge in the 1970s, Finnish unions and organised labour have increasingly understood and accepted that most paper products must be produced where the markets are. This is an essential aspect of the survival strategy of the major forest product industry enterprises.
Other concrete examples also illustrate how the increasing globalisation of the multinationals based in Finland may be the best, or perhaps even the only way to ensure the continuity of jobs in Finland. Even a cursory understanding of these cases leaves little room for oversimplified views about how to survive in global competition.
Finland's sustained profound dependence on foreign trade has also taught the Finns the rudiments of business finance and public economy. China has become Finland's largest trading partner in the developing world. In 2002 exports to China accounted for 2.5 per cent of total Finnish exports. In turn, China provided 3.5 per cent of Finland's imports. Valued in euros, the Sino-Finnish trade was roughly in balance, as the overall Finnish trade account showed a large surplus. Many Finns are well aware that China's economic success means more orders for Finnish export manufacturers, and this also translates into demand for the skilled Finnish labour force.
However, with the national unemployment rate remaining stubbornly close to the nightmarish ten per cent limit, the general sentiment is more sensitive to bad news about the China phenomenon than to its positive aspects. News of China greedily absorbing jobs is amplified by speculation about what will happen to Finland's labour market after May 2004 when Estonia, Poland and several other countries accede to the European Union. Stories about the China phenomenon and the risks of European Union enlargement cause concern for large segments of the working population, as recent months have seen a significant wave of redundancies in well-established enterprises.