* Hollande says contracts worth 18 billion euros
(updates with deal signatures)
By Andrew Callus and Elizabeth Pineau
PARIS, March 26 China's President Xi Jinping and
French counterpart Francois Hollande oversaw the signing of a
series of industrial co-operation deals and multi-billion dollar
aircraft sales in Paris on Wednesday, the business highlights of
a Chinese state visit.
Much of what was signed had only ceremonial significance.
However, Hollande's government, bruised by losses in last
weekend's municipal elections and deeply unpopular for its
failure to tackle record unemployment, hopes to encourage more
deals and harness France's patchy economic recovery more tightly
to the growth of the world's second-largest economy.
"Eighteen billion euros' worth of contracts. That means
jobs, growth, and above all the prospect of more to come in the
years ahead," Hollande said.
At the signing ceremony at the president's residence, the
Elysee Palace, Dongfeng and PSA Peugeot Citroen
, signed a deal in which the Chinese car maker will buy
a 14 percent stake as part of a recapitalisation deal for the
struggling French carmaker.
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, and flanked by their respective
delegations in a room decorated throughout in red, the two men
also watched China sign a new 10-year agreement allowing Airbus
to extend a deal to assemble A320 planes in Tianjin to
China also signed up to buy 70 new aircraft including 27
Airbus A330s which had been previously ordered but frozen
because of a trade dispute - all worth $10.2 billion at list
prices, and to co-produce French EC-175 helicopters with Airbus
and co-operate on turbo-prop engines with France's Safran
. Aerospace accounts for 29 percent of French exports to
The other highlight of the deal signing was a set of nuclear
energy and liquefied natural gas (LNG) agreements involving
French utility EDF, nuclear engineering firm Areva
, China General Nuclear (CGN), Total
and CNOOC - all of which are already working
on partnerships in China.
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.
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
Mahlich and Susan Fenton)