Swedish firms are tapping China's growing demand for environmental technology, a potential bright spot in Sino-Swedish economic cooperation as Sweden's largest trading partner in Asia targets greener development.
Wallenius Water AB, a Swedish environmental technology company that specializes in chemical-free water purification, saw its relations with China blossom at the 2010 Shanghai World Expo and reaped its first harvest in north China's Tianjin municipality.
The company caught the eye of technicians from east China's city of Tianjin at the Expo's Sweden pavilion. The company delivered a 6-million-yuan (952,000 U.S. dollar) recirculating aquaculture system (RAS) in March of this year to the Minfeng Aquaculture Company in Tianjin, marking the first export of its equipment to a Chinese aquaculture firm.
"Its water-saving effect is remarkable. The amount of water needed to replenish the fish farms is only 0.5 percent of the previous amount," said Chen Mengmin, general manager of Minfeng.
With an annual output of 50 to 60 tonnes of fish, Minfeng is just the beginning of Wallenious Water's expansion plan in Tianjin.
The company has signed a memorandum of understanding with the Tianjin Leadar Group, a local conglomerate that took in sales revenues of 4 billion yuan in 2011, said Liang Chao, project manager of Wallenius Water (Tianjin) International Trade Co., Ltd.
He said the company is preparing to buy and manufacture components for their RAS facilities in China and set up a technology research center in Tianjin.
"Water shortages have become an urgent problem. We want to expand our market share in China, starting with fishing," said Liang, who added that his company aims to extend its operations in China to drinking water sterilization and water circulation.
Wallenius Water is currently looking to business opportunities in Tianjin, where the per capita share of water resources is far below the global "danger threshold" of 1,000 cubic meters. The government of Tianjin has also voiced a desire to develop its aquaculture industry.
China's aquatic products account for more than 60 percent of the global total, but its reliance on traditional fish farming in ponds and flow-through aquaculture systems threatens to exhaust the country's limited water resources.
In Tianjin's Binhai New Area, local authorities in 2010 launched a project to utilize recirculating aquaculture systems in all fish farming companies before 2015.
The local authorities' goal is just a small part of the country's overarching ambition to consume fewer resources and protect the environment, according to a national development plan for the 2011-2015 period. About 3.4 trillion yuan in investment will be needed to fund environmental protection efforts during the period, according to the plan.
"In the eyes of Swedish companies, China's market for environmental technology has huge potential but has yet to be tapped," Liang said. "They expect substantially higher environmental awareness among Chinese people and companies, which is something that is urgently needed."
To tailor its products to the Chinese market, Wallenius Water plans to produce a simpler and cheaper version of its RAS facilities to attract Chinese companies.
A one-time investment of 6 million yuan will be hard to accept for many aquaculture firms, although the cost is expected to be offset by the profit increases that will result from increased output and energy savings, Liang said.
The unmatched technology and services of Swedish firms give them a lot to offer to meet China's rising demand, said Wang Wen, general manager of Sino-Swedish (Tianjin) Environmental Technology Development Co., Ltd.
Sweden ranked third on the World Wide Fund for Nature's Global Cleantech Innovation Index, an index released in February that evaluates conditions for the creation of clean technology start-ups. Sweden followed Denmark and Israel, while China placed 13th out of 38 countries.
Jointly founded by the Tianjin Academy of Environmental Sciences and the Swedish Environmental Research Institute, Wang's company sells Swedish environmental technology and products to China and supports research on clean production with money from Swedish environmental funds.
The company previously introduced early warning systems for microbes to the tap water industry in Tianjin and is promoting indoor air purification systems in Beijing, Wang said.
"Sweden has plenty of advantages in energy conservation and environmental protection, especially in urban garbage disposal and renewable energy utilization," he said. "There is huge government and non-governmental investment in promoting their technology abroad. For example, the Swedish government subsidized 50 to 60 percent of the cost of the first facility we brought in from Sweden."
Cooperation in green technology is set to gain momentum after Premier Wen Jiabao's visit to Sweden, the first official visit to the country by a Chinese premier in 28 years.
China and Sweden saw their bilateral trade expand to a record high of 13.7 billion U.S. dollars in 2011 and are pinning hopes on a greener economy to support growth and boost economic ties.
The two sides issued a framework document on strengthening strategic cooperation in sustainable development during Wen's visit.
China would like to promote cooperation with Sweden in environmental protection and sustainable development, Wen told his Swedish counterpart Fredrik Reinfeldt during a meeting held on Tuesday.
Sweden has been a global leader in environmental protection and sustainable development, while China has taken up sustainable development as a national development strategy, Wen said.