Q. – Should we fear China’s offensive in Europe?
THE MINISTER – In 30 years, China has gone from representing less than 1% of global exports to 10% today: her companies are now globally competitive, and she has become an important banker in the world, with the world’s largest foreign exchange reserves. After five centuries of eclipse, China is back at the forefront of the world’s economies. It’s a new situation, which inevitably creates some friction. Do we have to be on our guard? Of course. But these changes also open up a number of opportunities.
Q. – Such as?
THE MINISTER – China’s domestic market is huge. So are the country’s infrastructure needs: there are so many areas where French companies have a real chance. Today, France’s market share in China is 1.3%. The least we can say is that there’s room for progress.
Q. – Isn’t Europe in danger of becoming dependent on the Chinese miracle?
THE MINISTER – The danger is clear insofar as there’s a structural deficit in Europe’s foreign trade with China. It’s also true of France: Germany and China are our two main trade deficit partners. As Beijing builds up reserves, it’ll be tempted to use a (small) part of them to take up positions in Europe. There’s an unspoken political risk for the Europeans: the more indebted the various countries become to the Chinese creditor, the less tempted they’ll be to take rather tough measures, on trade policy for example. That’s one of the reasons why the reduction in the public deficit must be a national priority.
Q. – Isn’t there also a problem of reciprocity with China?
THE MINISTER – Absolutely. We’re open to Chinese products, companies and investments. Take, for example, public works contracts: we’re prohibited from favouring our national flagships, in the name of the principle of free competition on the European internal market, but the Chinese reserve a large sector of their public works contracts for their own companies. China is building a motorway in Poland with European funding; the reverse must also be possible. That’s why President Sarkozy wants to develop the rules, particularly in the trade and monetary fields./.