Åsa Malmström Rognes

China has emerged as a key development partner for Southeast Asia. In this chapter, how China’s position has evolved over the past two decades is examined, and what that means for Sweden going forward with new aid and trade policies. The chapter show how China has emphasised economic cooperation and prioritised infrastructure funding as the basis for development. China has simultaneously become the leading trade partner for Southeast Asia, and Chinese companies have begun to invest more as well. Sweden, as a much smaller donor, trade partner and investor, cannot compete with China but can provide development support in targeted sectors and aim for synergies between aid and trade.

COVID-19 is a global pandemic, and this calls for a global response. So far, the responses have mainly been national, but the EU has begun to act on behalf of the union as a whole by setting aside funds for the recovery. The United States has largely relinquished its leadership role in this global crisis, and while China has taken a step forward and shipped medical supplies to a number of countries, it does not have the aspiration to lead. We line in a changing world order where four years of leadership by President Donald Trump has led to a loss of trust in American leadership. Even if President-elect Joe Biden will prioritize multilateral solutions, there is no way back to the old world order. At the moment, there is a power vacuum where the EU and Japan together can make a difference.

In this article, Patrik Ström, Marie Söderberg, and Åsa Malmström Rognes discuss the importance of Strategic Partnership Agreements (SPA). With COVID-19 and tensions between China and the USA, SPAs can play an important role to foster creativity and innovation. Focusing on the SPA between the EU and Japan, the authors highlight three critical innovation areas – connectivity, health, and multilateral collaboration. By using COVID-19 as a catalyst, strengthening collaboration between countries, but also between state and private organizations can help to drive innovation and economic prosperity.