| PARIS, March 26
PARIS, March 26 China's President Xi Jinping and
French counterpart Francois Hollande are set to oversee the
signing of two industrial co-operation deals in Paris on
Wednesday, the business highlights of a meeting that carries a
strong investment theme.
Chinese carmaker Dongfeng is set to deepen ties
with PSA Peugeot Citroen, buying a 14 percent stake as
part of a recapitalisation deal for the struggling French
Peugeot and Dongfeng plan to extend an existing joint
venture and Chinese production to enter new Southeast Asian
markets and to jointly develop new vehicles and technologies.
At the same ceremony Airbus is set to agree the
sale to China of at least 150 aircraft worth $20 billion, and
possibly as many as 200, in a deal that could include both
planes and helicopters. Progress in talks on opening a second
Airbus factory on Chinese soil may also be announced.
However, aircraft deals signed in the presence of heads of
state in the past have sometimes included orders that are
already known about. There might not be any significant new
details on the auto industry tie-up either.
But for Hollande's government, bruised by last week's losses
in a first round of municipal elections which many blame on its
failure to tackle record unemployment, there are hopes the deals
will lead to more tie-ups and harness France's patchy economic
recovery more tightly to the growth-leveraging potential of the
world's second largest economy.
France trails far behind neighbouring Germany - also on Xi's
European itinerary - on the trade front with China, accounting
for just 1.2 percent of Chinese imports compared with 4.8
percent in Germany's case.
Foreign direct investment (FDI) in both directions between
France and China is modest, but France is in deficit there too
at the moment.
French FDI in China totalled 16.7 billion euros ($23
billion) at the end of 2012 - just 1.83 percent of China's total
FDI but still dwarfing the 4.2 billion euros of Chinese
investment in France, which is just 0.9 percent of its FDI
total, according to Bank of France figures.
Dongfeng's Peugeot stake purchase alone, at 800 million
euros, is equivalent to a fifth of that FDI stock.
"These investments are welcome in France and we are here to
facilitate them," said French Foreign Minister Laurent Fabius at
a reception for Xi in the southeastern city of Lyon on Tuesday
Nuclear co-operation may also be on the agenda at the
multiple deal-signing ceremony after agreements last year
including a letter of intent for French firms to build a used
fuel treatment and recycling facility in China.
Officials are also considering whether to build more
reactors at China General Nuclear's (CGN) Taishan
site in the south of the country, where French utility EDF
is its partner, building reactors designed by French
Xi's visit marks 50 years of diplomatic relations between
the two countries. Recognition of the People's Republic of China
by France in 1964 in the face of anti-Communist hostility
elsewhere in the west forms part of France's claim to a special
(Additional reporting by Marine Debliquis; Editing by Greg