"Finland should be more worried about Russian economy than Chinese economy"
China's recent stock market panic and the fears of China's economic development have been the news topic here and elsewhere over the last few days. How would China's economic slowdown affect the Finnish economy and Finnish companies? Professor Klaus Meyer of the China Europe International Business School in Shanghai estimates that Finland should be more concerned about Russia's than China's development.
Professor Meyer is currently participating the 13th International Business Conference at the University of Vaasa. He refers to the Finnish export statistics. Russia is still much bigger trading partner to Finland than China.
Many are wondering how China's situation will impact on the overall growth of the world economy.
– The world economy should be flexible enough to handle this too. China's growth is slowing - there is no doubt about that. However, the growth figures were overestimated in the first place, says Meyer.
Gambling in the Chinese stock market
According to Meyer, the Chinese stock market is possibly less connected to the real economy than the European. Therefore he thinks that the stock market crash in China will not have a dramatic effect on the real econony as one might otherwise expect.
– The Chinese stock market has a lot of private individuals as investors, who have less financial expertise than the professional investors.
In addition, many Chinese investors tend to speculate, which is causing volatility to the market.
– Gambling is prohibited in China, so the Chinese are playing the stock market , says Meyer.
Finnish companies still have good opportunities in China
Meyer admits that for certain industries there are high risks in China. For example, the raw material suppliers have reason to be worried. The same applies to the machine industry, which exports to China.
He sees that Finnish and other European companies still have very good opportunities in China.
– China has a huge environmental pollution problem and the Chinese government is very determined to do something about it. This is a huge opportunity for European companies that have environmental technology.
Meyer's scientific research is focused on the emerging economies - particularly in Asia. He tells it was a deliberate choice for him to work in China. He wanted to be close to his research topic.
– How does the institutional environment effect the strategies of the businesses is my main research question. I have studied for example the entry modes, he says.
The University of Vaasa as a conference venue is very familiar to Meyer.
- This is the tenth time I'm attending the International Business conference in Vaasa.
In Vaasa he likes the fact that the interaction with other researchers attending the confrence is more intensive than it might be if the confrence was held in a big city, where there are a lot more distractions.
The 13th Vaasa Conference on International Business was arranged on August 26–28, 2015 by the University of Vaasa, Finland. There were around 100 participants from almost 20 different countries in the conference.
The Board of the IB Conference 2015 and vice rector Jari Kuusisto.
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