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China and France expected to strengthen economic ties

BusinessChina and France expected to strengthen economic ties

According to industry experts and business leaders, China and France are poised to deepen their commercial relations and expand trade, investment, and other collaborations to spur business activity and global economic recovery. With China’s opening-up policies, France’s “France 2030” investment plan, and the success of the Belt and Road Initiative, both nations are expected to scale up trade and investment in areas such as the digital economy, services trade, new energy, and high-end manufacturing.

The “France 2030” investment plan, which was unveiled by the French government in 2021, aims to support the transformation of several industries, including automotive, aerospace, digital, green, biotechnology, culture, and healthcare. These are fields where France has excelled and seeks to sustain excellence, according to Business France, a French government agency that promotes exports and foreign investment.

Despite challenges such as declining global demand and increasing trade protectionism, China and France have maintained stable bilateral trade relations across industries, according to Cui Hongjian, director of European Studies at the China Institute of International Studies. With China undergoing a new round of industrial upgrading and green transformation, Cui believes the country will continue to export consumer goods and benefit from France’s environmental protection solutions and high-tech products.

Although the bilateral trade value between China and France dropped 4.4 percent year-on-year to $81.23 billion in 2022 due to the COVID-19 pandemic and geoeconomic fragmentation, French exports to China include water treatment, chemical and pharmaceutical products, fashion, energy infrastructure, and agricultural products. Meanwhile, China exports construction machinery, manufacturing equipment, steel, electronics, textiles, garments, and household appliances to France.

As Chinese industries accelerate their digitalization and decarbonization, Yin Zheng, executive vice-president of Schneider Electric’s China and East Asia operations, believes that French and European companies like Schneider Electric will benefit from the resulting opportunities and growth spaces. Schneider Electric, a French multinational that has been operating in China for 36 years, has grown from a joint venture factory to one with 29 factories and distribution centers in China, with a more than 90 percent local purchase rate. With two research and development centers and one innovation lab established in China in the past four months, Schneider Electric is optimistic about future growth and expansion opportunities in the country.

The French Chamber of Commerce and Industry in China (CCI France Chine) also conducted a survey of its members, revealing that 47 percent of respondents plan to increase their investment in China over the next three years. This is a significant increase from the 23 percent reported in the chamber’s previous survey in September 2022, indicating a more positive outlook for business confidence and investment in China in the coming years.

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