Alexander Husebye, CEO of Centre of Business History, shares a story of Sweden's and China's business links throughout history. Presentation at the Stockholm Chamber of Commerce's annual World Trade Day, 28 Aug 2014. More about the Center at www.naringslivshistoria.se.

1. My name is Alexander Husebye and I am CEO of the Centre of Business History in
Stockholm. Wepreserve and present business history, on assignment both from
individual companies and by the Swedish business sector at large.
Today, I want to share with you a story linked to today’s programme. It’sabout two great
cities connecting to each other during a most fruitful period of free trade. It is also a
success story about a then relatively small company from an export driven country in the
European north which takes its first steps out on a global market. And last but not least it
is a story of what can be achieved by individuals, given the right time and circumstances.
”Stockholm calling Shanghai!”
Your Royal Highness. Honored Guests.
Alexander Husebye @ Världshandelsdagen 2014
Stockholm Chamber of Commerce, 28 Aug 2014
”Stockholm calling Shanghai!”

2. Let me start with a letter. I know it’s hard to see, so let me read out aloud:
”With your excellent manufacturing and the recognition and the grasp on the
world market that you have achieved, L M Ericsson mechanical engineering
workshop should become one of the largest in the world, a world power. ”
This letter is over 100 years old. And it comes from the other side of the globe.
From Shanghai, China.

3. The author’s name was Gustaf Öberg. Sea
captain, businessman and adventurer.
Lobbyist and telephony visionary. All of these
ideal qualifications for becoming Ericsson's
first general agent in the Chinese market at
the end of the nineteenth century.

4. As a sea captain, Öberg sailed up and down the Chinese coast for many
years during the 1880s. During this period, he also took the opportunity
to establish himself as a businessman in Asia. He lived in Shanghai some
of the time, but also in Hai Phong, in what was then Indo-China and
today is Vietnam.
Indo-China was tough on Öberg. The French, who had colonised Indo-
China, arrested him on charges of selling arms to guerrilla groups. His
assets were confiscated and he was sentenced to death.
Miraculously, however, Öberg managed to escape from prison and out of
Indo China, disguised in the traditional garb of a Chinese labourer. He
was eventually cleared of the arms smuggling charges. Having escaped
from prison, and the impending execution, he wrote a Christmas card to
his young family in Stockholm who hadn’t heard of him for two years
stating “I´m still alive, Merry Christmas to you”... He then established
himself ashore as a business man in the growing city of Shanghai.

5. I’ve called my talk today “Stockholm Calling Shanghai”. But perhaps it
should have been the other way around. Because in fact, it was Öberg
himself who took the initiative to start selling Ericsson telephones and
other equipment in the city.
As the letter I read to you earlier made clear, Öberg was convinced that L
M Ericsson mechanical engineering workshop as the company was called
at that time, had a brilliant future in Shanghai – and worldwide.

6. Speaking of Ericsson. It all began when Lars
Magnus Ericsson in 1876 started his workshop
in a shed in a backyard quite nearby on
Drottninggatan in Stockholm. The business
grew enormously and only twenty years later
Ericsson were represented on several
continents including Africa and Australia.
There were around fifteen hundred
employees, and the turnover was around 4
million Swedish crowns.

7. At the Stockholm World Exhibition in 1896,
inaugurated by your Royal Highness’ Great-
Great-Great-Great Grandfather Oscar II,
Ericsson, together with other Swedish
companies, boasted their products with pride.
This was first of several high times of Swedish
exports.

8. We go back to China and Shanghai in the 1890´s. Following the Shanghai launch of its products,
sales of Ericsson telephones and other equipment were initially slow.
The telephone operator in Shanghai at the time was the British Oriental Telephone Company.
They were not particularly interested in Ericsson's Swedish produced telephones. But neither
did they appear especially interested in their concession to operate the telephone network in
the city of Shanghai. When the time came for renegotiations with the Cantonese authorities in
1900, Gustaf Öberg proved to be a very aggressive and successful lobbyist for bringing in a new
operator, Ericsson. For example, one of his arguments was to compare how things were run in
the very faraway city of Stockholm.
Oberg’s efforts resulted in the formation of a new operator – the Shanghai Mutual Telephone
Company . And, as it happened, with himself as managing director!

9. But wait a moment! What was so compelling
about the argument that Stockholm on the
other side of the globe was such a model for
the Chinese decision makers? Well in the
middle of 1890´s Stockholm was the most
densely telephone equipped city of the
world! And the central telephone Exchange,
seen here on its location at Brunkebergs
Torg was the largest of them all.

10. Back in China, the time for developing telephony in Shanghai was ripe for the Shanghai Mutual Telephone
Company to enter the stage, and the business really took off. The first task was to build a new telephone
exchange in the city. And then carry out a campaign to attract subscribers. Once again Öberg's persuasive
skills were successful. ‘
To enable further expansion, the company soon needed to extend and improve the telephone network in
Shanghai. Yet again Öberg turned to Ericsson for their expertise. There was just one snag. Ericsson had
never built a telephone network in such a distant premise!

11. Finding expertise from outside was no easy
matter. That is clear from a letter from Lars
Magnus Ericsson to his wife Hilda Ericsson in
November 1900. Lars Magnus had long
believed it to be impossible to find a Swedish
engineer who also was willing to travel to the
other side of the globe. But finally he found
that person: Fridolf Langton of Gothenburg,
who was prepared to do what at first, seemed
impossible.

12. With Fridolf Langton aboard in Shanghai the business
now really took off. Öberg started building a central
exchange and a large office. He documented the
construction process carefully, with numerous
photographs. Initially, Öberg's belief in the Chinese
market was significantly stronger than Lars Magnus
Eriksson’s. Ericsson as a company was fully occupied
conquering other parts of the world. But Öberg's
persuasiveness once again bore fruit.

13. Chinese representatives were so interested in
Swedish telephony that in 1905 they sent a
large delegation all the way to Stockholm and
Ericsson to study installations. And,
presumably, to confirm that there was now a
business relationship. This particular moment
was documented in pictures like this taken in
Ericsson's magnificent boardroom at
Tulegatan in Stockholm

14. …and all the Chinese signed
the company's visitors' book. I
am showing this list of names
because today, a century later,
it is one of Ericsson's best
examples of sustainability in
customer relations and good
customer care. I think that Mr.
Ulf Pehrson who will speak
later this afternoon could
verify the impact it does today
to have such a history.

15. Meanwhile, interest in the market in the
Middle Kingdom was growing. In 1913,
Ericsson began supplying equipment for
Guangzhou's telephone network too, and
negotiations for Beijing's started. But nothing
came of it - for any of the players. Because
the First World War put an end to free trade
and trade between Sweden and China. Gustaf
Öberg, however, stayed in China until his
death in 1920. By then he was a much
respected businessman. Here we can see him
decorated with both the Swedish Order of
Vasa and the Imperial Order of the Double
Dragon.

16. Ericsson had no presence in China for several
decades. The Japanese bombing of the
country in the 1930s, the Second World War
and the creation of the People's Republic of
China meant the market was closed to foreign
companies. The picture shows equipment
being tested in Shanghai in 1928. It would be
almost 50 years before Ericsson would resume
business with China again.

17. A new dawn came in the 1980s. China’s
change of direction towards a more business-
led economy, initiated by the Communist
Party’s general secretary Deng Xiaoping, made
it easier for foreign companies to operate in
China. As early as 1979, China's Vice Premier
visited Ericsson to learn more about the ej ex i
system, which already had begun its success
across the world. The picture shows him with
Björn Svedberg, Ericsson's CEO at the time.

18. And today, Stockholm and Shanghai connected again on several levels;
communications equipment but also research and development. China's
first mobile phone system was delivered in 1985 and before long Ericsson
also won a really huge order for Shanghai. This brought Ericsson back to
the city where it all started, almost a hundred years earlier. And to that,
research laboratories were established in several cities around China.

19. Incidentally, the very first mobile phone call in
Shanghai was connected with equipment from
Ericsson.

20. Ladies and gentlemen, it will soon be 120 years since the first cargos from
Stockholm with Ericsson telephones came ashore in Shanghai. The market
that Ericsson first thought was too far away has today acquired unheard-of
significance for the company. – But let us stay true to history - Captain
Gustaf Öberg already knew that this would happen.
Of course there is the difference of the scale of business. The Ericsson that
now operates globally has grown from the 1500 employees of the 1890s
to over 114,000, and with local representation in over 130 countries

21. What can we learn from this history? Well, Sweden and Swedish companies for sure have a
great and unique history in taking on challenges in a constantly changing world regardless of
time and geographical distance. In this story, you also find the individual’s importance to
progress business and trade. There is also communication technology as one of Sweden's
and Stockholm´s most important sectors, where we have a long relationship with countries
such as China. And last but not least, there is the importance of free trade for export-led
countries such as Sweden with its many smart technology-led companies.

22. Again, my thanks to the organizers for
allowing me to share this story with you. And
my thanks to you all for your patience and
kind attention.
Alexander Husebye, CEO and President
alexander.husebye@naringslivshistoria.se
www.naringslivshistoria.se