France hints at aero, nuclear deals during Xi visit

PARIS Fri Mar 7, 2014 11:07am EST

French Minister for External Trade Nicole Bricq attends an interview with Reuters in Paris, October 29, 2013. REUTERS/Christian Hartmann

French Minister for External Trade Nicole Bricq attends an interview with Reuters in Paris, October 29, 2013.

Credit: Reuters/Christian Hartmann

PARIS (Reuters) - France expressed optimism on Friday over its ties with China in nuclear energy and aerospace in a sign of possible business deals when China's Xi Jinping makes his first trip as president to Europe in late March.

Asked about the opportunity for France to win contracts, French Trade Minister Nicole Bricq told reporters: "We are expecting much from the positive messages we have seen, especially in those areas."

Europe's Airbus is seen as close to a deal to sell A330 jets to China and has offered to open its second plant in the country in a move that could also help resolve recent friction over Chinese objections to European aviation policies.

Industry sources said last month that Airbus had offered to increase its industrial presence in China by opening a cabin completion center for the A330 jets. It already assembles smaller A320 aircraft in the port city of Tianjin near Beijing under a deal that could also be renewed.

"We have always been open to additional industrial co-operation when the market supports it," Chief Executive Fabrice Bregier said last month.

Airbus is offering a "Regional" version of the A330 that would help China overcome congestion on domestic routes, but U.S. rival Boeing is pulling out the stops to offer alternatives, industry sources said last month.

China has halted imports of A330 aircraft worth billions of dollars in a row over a European Union scheme for dealing with airline emissions, which it says would penalize its airlines. The row so far, however, only affects international travel.

NUCLEAR REACTORS

The planemaker is anxious to boost sales of the long-haul A330 because of a steep drop in expected deliveries in 2016.

Airbus Chief Executive Tom Enders declined to comment when asked about a possible Chinese order.

"China is a very important A330 customer," he said after a breakfast with reporters in Washington. "We have a lot of A330s flying successfully in China. And certainly we hope to do more A330 long-range business with the Chinese in the future."

In the nuclear energy sector, Chinese utility China General Nuclear (CGN) and French utility EDF are in a 70-30 joint venture to build two 1600 megawatt EPR reactors designed by France's Areva in Taishan, southern China. The first is expected to be connected to the grid this year or next.

China has not decided whether to build more reactors at the site or which supplier to use. Westinghouse, owned by Japan's Toshiba, is Areva's main foreign competitor in China.

"I have visited the construction site of the EPRs in China, and we hope that France is well positioned for the third and fourth reactors," Bricq told a news briefing.

"We hope for a positive message as last year was the 30th year of our nuclear cooperation with China, so this is a very important moment for us."

Xi will participate in a nuclear security summit in The Hague on March 24-25, which U.S. President Barack Obama will attend with other world leaders.

From the Netherlands, Xi will travel to France and Germany before concluding his trip in Brussels on March 29, where he is expected to discuss an investment pact between China and the European Union, towards which negotiations began in November.

The EU is China's most important trading partner and China is second only to the United States for Europe in terms of trade. But growing Chinese export volumes have raised concerns in the EU, which is struggling to overcome a debt crisis, about the impact on its industries.

(Reporting by Jean-Baptiste Vey, Tim Hepher and Geert De Clercq; Additional reporting by Andrea Shalal in Washington; Editing by Janet Lawrence)

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