Macron urges China to open market wider

President Emmanuel Macron offered to open up France to Chinese investment in exchange for greater access to China's booming markets on Tuesday, warning during talks in Beijing that existing trade imbalances would lead to protectionism.

The French president was in Beijing on what his government billed as a trip to expand French and European relations with China. Macron began his first state visit to China with a stop in Xian on Monday, an eastern departure point of the ancient Silk Road.

"We have an access to markets which is unbalanced, unsatisfying," Macron told members of the French and Chinese business community at a start-up incubator in Beijing.

"If we don't deal with this responsibly, the first, natural, reaction will be to close up on both sides."

TRT World's Iolo ap Dafydd reports.

On the second leg of a three-day state visit, Macron is hoping greater openness from China, coupled with lobbying from the 50-strong business delegation travelling with him, will help narrow the $36 billion (30 billion euro) trade deficit Paris runs with Beijing.

But despite bringing with him some of the heaviest hitters in French business, finance and industry – including senior executives from Airbus, BNP Paribas, AccorHotels, EDF and LVMH – there were no immediate announcements of mega-deals. Instead, smaller contracts or commitments to go on talking were signed.

TRT World speaks to Joel Flynn in Hong Kong.

'Europe is back'

BNP Paris was set to announce plans for a joint-venture on consumer credit, an official said, and added that French nuclear group Areva had "never been so close" to signing a contract to build a reprocessing plant in China.

In his short time in office so far, 40-year-old Macron has managed to push through reforms to France's labour market and seen a steady rise in business and consumer confidence. Growth forecasts for 2018 have been upgraded.

In the absence of either German and British leadership, with Chancellor Angela Merkel bogged down in coalition negotiations and Prime Minister Theresa May swamped by Brexit, Macron has emerged as arguably the strongest voice in Europe.

The trip to China is well-timed to convey that message and Macron has not been shy about promoting it, declaring after he arrived that "Europe is back" and announcing that he would visit China every year of his five-year presidency.

Open on both ends

But while the rhetoric has been strong, and TV commentary suggests Macron and his 64-year-old wife Brigitte have been a big hit with the Chinese, the underlying success of state visits is best measured these days in business contracts.

One of the most closely watched sectors is aerospace, with Airbus talks to sell 100 or more jetliners to China, officials familiar with the talks said last week.

Jack Ma, founder and executive chairman of online retailer Alibaba, gave Macron's pitch for more openness his backing on Tuesday, but added both sides had a part to play.

"I think he's right, China should open more, China is opening more," he told reporters on the sidelines of a business forum at the Great Hall of the People in Beijing.

"France should open more, China should open more," he added.

Macron, who met President Xi Jinping on Monday evening, said the two countries would fall into a lose-lose situation if continued restrictions on foreign firms in China prompted France and Europe to put a brake on Chinese investment in Europe.

"Let's open up both instead," said Macron, whose government has at the same time called for greater scrutiny of Chinese investment in Europe, particularly in sensitive sectors, concerned about protecting French interests and security.

Number of new deals

Despite the relatively small number of deals announced so far, officials were confident of success.

"We're confident we'll achieve more than symbolic stuff," a French official said, speaking on condition of anonymity. As well as aerospace, the agrifood sector is seen as key.

At the start-up incubator, French engineering firm Fives signed a deal with Chinese online retail giant JD.com, which will set up a logistics centre in France to source French food and luxury products for sale online in China.

JD.com agreed to sell $2.386 billion (2 billion euros) worth of French products – such as Remy Martin cognac or Evian water – on its website over the next two years. 

Horse diplomacy

Macron went out of his way to win the heart of the Chinese leader on the first day of his state visit on Monday, offering him a horse from the elite French Republican Guard.

The choice of the gift, an "unprecedented diplomatic gesture" according to the French presidency, was made after the Chinese president expressed his fascination for the 104 horsemen who escorted him during his last visit to Paris in 2014.

"The horse's name is Vesuve de Brekka, a French horse from Lower Normandy. He is nine years old and first came to the calvary regiment at the age of three," said a French Republican Guard.

It is the first time France has offered one of the elite cavalry corps' horses and is also a response to China's "panda diplomacy," after Macron's wife Brigitte became the godmother of a Chinese panda lent by Beijing to a zoo near Paris.

"It mattered a lot for the president, even if it was very complicated to import a horse for sanitary reasons. It's a symbol of French excellence," an Elysee official said.

TRT World's Christine Pirovolakis reports.