President Xi Jinping arrives in France Sunday. He is achieving a trip in Europe at a tense time due to Brexit uncertainties and to the trade negotiations with the U.S. It is his second visit, after the lavish reception given by François Hollande in 2014 at Versailles palace. His predecessor, President Hu Jintao came in 2004 and 2009. Each time reference is made to 1964, when France officially recognized of China. But that historical decision was harmed by the gaffe made by the French ambassador when he mentioned in that circumstance “France comes back into Asia”. Beijing didn’t appreciate that at all. Nobody had forgotten the Summer Palace vandalism, international concessions and Indochina colonization.
If a mutual respect climate did slowly establish along the years, France has not been able to benefit from the extraordinary development of the country because it didn’t believe in it at the beginning and because it persists to think that this one is either precarious or constitutes a threat. Our economic achievements are affected by that. French exports in 2018 reached 27 billion euro when German ones were near 90 billion and Japanese and South Korean ones above 150 billion. The negative appreciation of economists and professional unions, relayed by the medias have contributed to dissuade France enterprises to consider a country which has become the second world economic power and to dissuade them to create there fruitful partnerships.
As a first bad news, Chinese economy would “slow”. Growth would be in 2019 between 6 and 6.5%, i.e. the lowest level for more than twenty years. It reached 6.6% in 2018. The same commentators add that these figures, a top of that, are highly overestimated. When we see the enthusiasm with which has been welcomed the announcement that in 2019 French growth would reach 1.4% when it was feared that it would stagnated around 1%, we believe we dream. That negative message is just adding itself to the numerous criticisms whose the country is the purpose. Whatever are the circumstances, it is perceived as a threat. If it is going too well, it is to the detriment of French interests, if it is believed, as it is the most frequent case that it is doing much less well that it is said it can generate a world crisis. How, in these circumstances, motivate French enterprises? The consequence, there are lost opportunities, which of course are not lost for everybody.
Regarding monetary issues, China is accused to manipulate its currency. Ten years ago, the country has decided to make its currency an international one. Despite some bumps, notably during 2015 summer, this strategy has been rewarding and has lead to the recognition of the Yuan as a reserve currency by the IMF. At the end, it will permit to reduce dollar domination, which France and many other countries are denouncing the excessive and insane role. Instead of hailing this achievement, observers see there the manifestation of a new imperialism. It is also put forward the excessive indebtedness of Chinese companies and the risks on international financial stability. It is like if hospitals were mocking charity, if we remember the circumstances which lead to the subprime crisis and the crisis of the euro. But, it is unfounded for two reasons. Chinese banks are not depending of financial markets to finance themselves because of the high level of local savings. In case of difficulties, they wouldn’t generate repercussions outside the country. Atop of that, China central bank has accumulated reserves of more than 3 000 billion dollars. The country itself does not depend, in case of a crisis, which is unlikely, from foreign lenders.
Beijing is also acting to make enterprises more responsible, which leads to payment defaults and makes the country nearer other countries financial practices. It is a paradox that these countries, which are always criticizing the excessive weight of the State in Chinese economy, worry about a policy which corrects what they are condemning. Since a short period, a technological threat is put forward: forty years of growth have transformed the Chinese production basis. From simple suppliers, companies have become competitors, not through the insidiously or illegally inveigling of know-how but through the acquisition of necessary knowledge and the training of the country men and women. They inscribed themselves in an historical tradition, the one which was at the origin of the fact that England, during the 18th century did not remain as the only industrial power of the planet. Regarding safety risks, it is not because a country has at its disposal sensitive technologies that it will inevitably use them as weapons against other countries. These technologies, legally or not, are easily accessible and it is not proved that hackers who would use them, are inevitably nationals from the country which developed them.
Last phantasm, the new Silk Road project perturbs Europeans, during the Chinese president visit in Italy. The former Middle Empire loves its history and it is what makes it close to France. The reference to infrastructures which allowed to export silk and ceramics under Han and Tang dynasties 1 500 years ago shows that the country is faithful to its past. It illustrated it through an exhibition, in the national museum in Beijing, located on Tien An Men square in 2014. The project has been renamed Belt and Road Initiative because maritime roads have been added to it. It is a program consisting in the construction of roads, railways and harbors in neighboring countries to support their growth and to develop exchanges. In growing faster, in Central and Southern Asia and in Africa notably, these ones will become trade partners. Chinese companies will benefit from markets their country has contributed to finance and everybody will be a winner. European critics are incomprehensible. Former colonial powers are not in a good position to blame Beijing because it does what they didn’t want or be able to achieve for half a century. These trains or these boats have no interest to come back empty to China and they will carry European goods to served countries, including China.
President Xi Jinping visit can be the opportunity to push back this negative feeling which dissuades French companies to increase their presence in China. But it is first the duty of political leaders and professional unions to open their eyes and to improve the image of the few successes French groups have achieved. At the beginning, they went through Hong Kong, in the nuclear industry and in public services. These well-balanced partnerships have been fruitful for their participants and extended to Mainland. Airbus has been able to assert itself as up-market products with the increase of the level of life of Chinese population. L’Oréal and Hermès found there essential growth sources. Peugeot, present in China for thirty years but with a low activity, to the difference of Renault, totally absent, had a spectacular rebound when a partnership has been concluded five years ago with a Chinese carmaker. To the opposite, the refusal by Alstom during the Nineties to participate to the high-speed train program has been a major mistake. Two reasons were put forward. Managers did not believe China will achieve it and they were afraid by a possible theft of their know-how. They remained on the quay. The program is a success and Chinese manufacturers did not need Alstom technologies, in fact not so original, to put in service their trains. It is time to take lessons of these successes and of these failures.
French companies can be successful in China, or miss huge opportunities. To motivate them, it is time to put an end to China bashing. It will not be done in one single day but France presence is so weak compared to our major competitors that we can only progress. Chinese president visit would then have contributed to what would be, in the French industrial future, a decisive turnaround.