Paris - China’s President Xi Jinping and French counterpart François Hollande oversaw the signing of a series of industrial co-operation deals and multibillion-dollar aircraft sales in Paris on Wednesday, the business highlights of a Chinese state visit.
Much of what was signed had only ceremonial significance.
However, Hollande’s government, bruised by losses in last weekend’s municipal elections and unpopular for its failure to tackle record unemployment, hopes to encourage more deals and harness France’s patchy economic recovery more tightly to the growth of the second-largest economy.
Hollande celebrated “e18 billion (R266bn) worth of contracts. That means jobs, growth and, above all, the prospect of more to come in the years ahead.”
At the signing ceremony at the élysée Palace, Dongfeng and PSA Peugeot Citroën signed a deal in which the Chinese car maker will buy a 14 percent stake as part of a recapitalisation deal for the struggling French car maker.
Peugeot and Dongfeng plan to extend an existing joint venture and Chinese production to enter new south-east Asian markets and to jointly develop new vehicles and technologies.
At the same ceremony, and flanked by their respective delegations in a room decorated throughout in red, the two men also watched China sign a new 10-year agreement allowing Airbus to extend a deal to assemble A320 planes in Tianjin to 2025.
China also signed up to buy 70 new aircraft worth $10.2bn (R109bn), including 27 Airbus A330s which had been previously ordered but frozen because of a trade dispute. It also agreed to co-produce French EC-175 helicopters with Airbus and co-operate on turbo-prop engines with France’s Safran. Aerospace accounts for 29 percent of French exports to China.
The other highlight of the deal signing was a set of nuclear energy and liquefied natural gas agreements involving French utility EDF, nuclear engineering firm Areva, China General Nuclear, Total and Cnooc – all of which are working on partnerships in China.
France trails far behind neighbouring Germany – also on Xi’s European itinerary – on the trade front with China, accounting for 1.2 percent of Chinese imports compared with 4.8 percent in Germany’s case.
Foreign direct investment (FDI) in both directions between France and China is modest, but France is in deficit there, too, at the moment.
French FDI in China totalled e16.7 billion (R247bn) at the end of 2012 – 1.83 percent of China’s total FDI but still dwarfing the e4.2bn of Chinese investment in France, which is 0.9 percent of its FDI total, according to Bank of France figures.
Dongfeng’s Peugeot stake purchase alone, at e800 million, is equivalent to a fifth of that FDI stock.
Xi’s visit marks 50 years of diplomatic relations between the two countries. Recognition of the People’s Republic of China by France in 1964 in the face of anti-Communist hostility elsewhere in the West forms part of France’s claim to a special relationship with Beijing. – Reuters