• Foreign direct investments boom in Stockholm
• China's ZPMC may set up wind power factory in Sweden
• Swedish waste firm makes comeback – in China

Swedish and other northern European companies in China are more bullish than ever. But Sweden and Europe need a more forward-looking and holistic strategy for the Middle Kingdom, according to two bank reports.

Both new investments and recruitment plans are up significantly but concerns over a shortage of skilled labour, high raw material costs and competition are reported among northern European companies operating in China, SEB said in its China Financial Index.

Earlier optimism has been transformed into action and more than half the companies surveyed plan further investments in the next six months with another third planning significant investments.

"We see in our own business how client flows and demand for financing is increasing significantly right now. The need for working capital financing is up and companies also need financing for larger investments than previously," Fredrik Hähnel, General Manager of SEB in Shanghai, said in a statement.

But as the Chinese economy is going through rapid changes, especially with the new development strategy for 2011-2015, European companies must gear up its analytic skills and tactical plan.

"Europe and Sweden are lacking a China strategy", Swedbank's chief economist Cecilia Hermansson wrote in its Asia Analysis released this month, adding that the last strategy was formulated in 2006. "The EU runs the risk of failing to keep pace with China’s rapid development".

A forward looking strategy has to understand China’s new development strategy and how it could affect the rest of the world, including the financial, labour, commodity and product markets. It has to be holistic, based not only on the macro economy but also other areas such as political science, sociology, psychology, technology and natural science, the report pointed out.

Back in as 2007 Prime Minister Wen Jiabao said: “The biggest problem with China’s economy is that the growth is unstable, unbalanced, uncoordinated, and unsustainable”. In times of transformation and uncertainty, nothing is more valuable that the right strategic information.