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Macron’s Travel Diaries - First step: China

BLOG - 8 January 2018

Macron’s decision to start off the year with a trip to China carries a symbolic weight, which adds a special aura to his arrival in Beijing. Elected in May by 66 % of the French electorate and supported by a strong parliamentary majority, the President was able to assert his power and authority. A quality much appreciated by Chinese leaders, who are astounded by Angela Merkel and Theresa May’s fragility, despite their respective successes in their countries’ parliamentary elections. 

France’s relationship to China is different to that of Germany and the United Kingdom. Indeed, the former is China’s first economic partner in Europe, and the latter will most likely become a hub for Chinese finance - once Brexit is “finalized”. Numbers show that China does not consider France as an economic power as important as Germany, despite many of its companies having made a name for themselves in the Chinese market. Amongst them are industrial companies such as Suez, Schneider Electric, Veolia, Seb, EDF and Michelin, luxury brands like Vuitton or Hermès, retailers like Carrefour and Auchan, and L’Oréal.

"Since the 19th Congress of the Chinese Communist Party in October 2017, China’s global leadership ambition has become even more obvious."

Macron comes prepared with many examples and sharp arguments in mind for his second encounter with Xi Jinping (they first met during the G20 in July 2017). Since 1964 - the year the People’s Republic of China was officially recognized by Charles de Gaulle’s government - the relationship between Beijing and Paris has varied from tough (like under François Mitterrand or Nicolas Sarkozy), to warm (as under Jacques Chirac) to neutral (as during Francois Hollande’s term). In the last years, France’s regional presence has become more balanced, encompassing more Asia-Pacific partners, like India, South Korea, or South-East Asia. No doubt this change has not remained unnoticed by China. Today, France is also the only European country to have a military presence both in the Indian Ocean and in the Pacific. France has the second largest exclusive economic zone in the world after the United States (11 million km2), located mainly in the Pacific (62%) and Indian Ocean (24%). It works closely with the U.S., Australia and New Zealand - which are other important regional maritime powers - thanks to the quadripartite monitoring group on maritime safety in the Pacific. 

These facts are useful to understand the complex relationship between China and France. Granted, both countries are permanent members of the United Nations Security Council and share common goals on climate. However, one is a member of the Atlantic Alliance and of a European Union with renewed ambitions in defence and security, while the other aims to dominate Asia, both economically and strategically. And since the 19th Congress of the Chinese Communist Party in October 2017, China’s global leadership ambition has become even more obvious. The North Korean issue - which will be an important topic at the Macron-Xi summit - illustrates the gap between the two countries. Indeed, France defends a firm position regarding the development of Pyongyang’s nuclear program, while China continues to suggest that North Korea freeze its nuclear program in exchange for a halt to major military exercises by American and South Korean forces(a proposal also rejected by the United States and South Korea).  

"Emmanuel Macron had spoken of the necessity to collaborate with Beijing on climate and environmental issues, but also of the importance of rebalancing trade exchanges and investments, which lean in favor of China at the European level."

Today, there is real economic imbalance, as both ministers Jean-Yves Le Drian and Bruno Le Maire reminded their Chinese interlocutors when they successively came to Beijing at the end of last year to prepare the President’s trip. The trade deficit must be reduced by €30 billion, but how? Nuclear projects (such as the construction of a radioactive waste processing plant in China by EDF and Areva) and aircraft projects (the purchase of Airbus planes) are progressing, as are some of France’s traditional sectors, like agribusiness, health, and even retirement homes. There is also French “soft-power”: luxury, design, culture, education, the influence of French language in the world… The country has indeed welcomed over 1.8 million Chinese tourists in 2016, which had a significant impact on the economy as a Chinese tourist spends about €3 500 per trip, on average. The number of Chinese students in France has also reached 28.000, a clear improvement, although it remains incomparable to other Western countries (United States, United Kingdom, Germany). 

When he was Minister of the Economy (from 2014 to 2016), Emmanuel Macron had spoken of the necessity to collaborate with Beijing on climate and environmental issues, but also of the importance of rebalancing trade exchanges and investments, which lean in favor of China at the European level. This explains the European Commission’s recent proposal to start screening - at least symbolically - foreign investments in some sensitive technological sectors or infrastructures. This project was initiated by Germany, France and Italy, but is also supported by the United Kingdom and Spain. 

Despite the fact that Macron symbolically picked Beijing as his first presidential destination in Asia, the will to balance France’s presence in the continent remains. In 2018, he will travel to India (a country which bought 36 Rafale planes for a total of $8.8 billion), South Korea (Winter Olympics?), and maybe Japan. South-East Asian countries, some of them visited by former President François Hollande during his term, should not be neglected either. At a time when China steps up its “Belt and Road initiative”, France should emphasize the importance of reciprocity, a necessary condition to the safeguard of each country’s interests. It is still early months in the Macron administration, hence the need to put his diplomatic stamp in such a key region. 

 

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