France Looks to Strengthen Economic Ties with China

French President Jacques Chirac's five-day state visit to China underlined the growing closeness of the two countries, which embarked on a strategic partnership seven years ago. A joint communique issued before the president's departure from Beijing said the two countries would join hands in promoting a world that is safer, more united and that showed greater respect for diversity. While Mr Chirac's purpose was unabashedly commercial - he was accompanied by a large delegation of businessmen and entrepreneurs, including representatives of small and medium-sized enterprises (SMEs) - he also underlined the close identity of political views between China and France. For example, he called for the lifting of the European Union's (EU) arms embargo on China and voiced support for Beijing's one China policy vis-a-vis Taiwan.

France is currently China's fourth biggest trading partner within the EU, with bilateral trade standing at US$13.4 billion in 2003, representing an increase of 60.9 per cent over the previous year. The more than US$4 billion worth of industrial orders he received during his visit in China will help to increase the momentum of bilateral trade. Contracts included the sale by French industrial giant Alstom of locomotives and trains to China worth up to US$1.2 billion as well as an order for six Airbus A-319s. However, contrary to expectations, no deals were reached for the new Airbus A380 super jumbo.

Similarly, there were no announcements on sales of French nuclear reactors. In an interview with French state television, President Chirac said that he was satisfied with the deals reached. 'There is a place to fill in China, a country with considerable development, and France must fill it,' he said. 'It is filling it, and I am happy about that.'

While the French president's interest was primarily in commerce, Chinese interest clearly was much wider-ranging. Premier Wen Jiabao hailed the development of the bilateral all-round strategic partnership between the two countries, saying that it was being consolidated and advanced. The country that China most wants to influence is the United States, the guarantor of the security of Taiwan, which Beijing wants to bring within the Chinese fold. It is in China's interest for the EU and the United States to compete for its favour. At least in part for this reason, China has said that it expects the EU to become its largest trading partner, dwarfing both the United States and Japan. And within the EU, China is evidently happy to have France compete against other countries, such as Germany and Italy.

To China, political support from France is at least as important as trade. An article on the People's Daily website pointed out that China and France share common understanding on many international issues, with both advocating a multipolar world (as opposed to a world dominated by the United States as the only superpower) and oppose unilateralism. The two countries, both of which have a veto in the Security Council, would also like to see the United States acting through the United Nations, which would play a more central role. Interestingly, the joint communique supported convening a summit meeting of the Group of 20 nations. In the wake of China's participation in a key session of the Group of Seven (G7) industrialised nations in Washington earlier this month, there have been suggestions that if China is not invited to join the G7, then perhaps the G20, which includes both developing countries such as China, India and Russia as well as developed countries, could assume the role of the G7 in guiding the world economy. The G20 represents two-thirds of the world's population and 90 per cent of its gross national product (GNP). What is also interesting is that next year, China becomes the president of the group, succeeding Germany. Thus, any enlargement of the role of the G20 would, ipso facto, be an enhancement of the role of China on the world stage.