Background: People’s Republic of China’s entry into the World Trade Organisation in 2001 and the Chinese government’s implementation of the Going global strategy initiated the internationalisation process where Chinese actors are encouraged to seek opportunities in foreign markets. The Sino-Swedish relations dates back as far as the 18th century when Sweden was one of China’s major trading partners. Sweden was also the first country to establish diplomatic relationships with China in the 1950th. In recent years, China has shown an increasing interest of investing in the Swedish market creating a “two-way street”, meaning that the investments are going both ways.

Problem Discussion & Purpose: The markets of Sweden and China both have their own dis-tinctive characteristics and unique business environments. However, the large socio-cultural distance complicates business between the two parts. Sweden is a country with political and market stability that posses advanced technology and know-how. Nevertheless, in relation to other European countries, Sweden has significant drawbacks. The aim of this thesis is to gain further understanding of what motivates Chinese investors to internationalize and why Chinese investors choose Sweden as well as how the entry process is carried out.

Theoretical Framework: The theoretical framework will outline a description of the develop-ment of internationalisation theories and the motives for internationalisation. Following is the concept of Where, When and How, focusing on Where and How through country competitiveness and the entry modes available. The final focus will be on the creation of networks along with the concept of Guanxi and personal relationships.

Methodology: The research is conducted with a qualitative analysis through primary data collection of semi-structured interviews. The study is a combination of explanatory and exploratory since it both tries to seek new insight in the subject and explain relationships between variables.

Conclusion: The internationalisation motives for Chinese companies choosing Sweden are market and strategic, identified as the wish to seek new opportunities, spreading capital risk and through international influences gain technological update and educational upgrade. When it comes to the vital factors to why Chinese investors choose Sweden, they can be categorised as hard and soft factors where the latter is stressed as the most important. Networks and relation-ships are important aspects in the Where factor and they are also vital when it comes to the How factor and the establishment process. Relationships are the essence of networks and when look-ing at the results from the research, several of the Chinese establishments in Sweden would not have happened without the presence of networks.