Trade Opportunities and Challenges
According to statistics from the first half of 2024, China’s exports to France reached $25.6 billion, an increase of 6.2% year-on-year. Particularly in the export of electric vehicles and renewable energy equipment, China has already taken a leading position in the French market.
The French government announced stricter scrutiny on the carbon footprint of imported goods. This policy directly affected the performance of Chinese steel and chemical products in the French market, causing a 4.8% decline in the export of these products this year. In an article, France’s Les Échos mentioned: “If Chinese companies cannot quickly adapt to these new environmental standards, they may face greater market pressure.“
In terms of technological cooperation, 2024 marks further collaboration between China and France in the fields of 5G technology and artificial intelligence. Huawei and French telecom giant Orange signed a three-year cooperation agreement, which is expected to provide 5G equipment and services worth €1.5 billion to the French market. There are still concerns in France about Huawei’s participation in the 5G network, especially regarding network security and data privacy.
Earlier this year, China General Nuclear Power Group (CGN) and French electricity company EDF upgraded their cooperation on nuclear energy projects, jointly announcing the construction of a new nuclear power plant in southern France, with a total investment expected to exceed €5 billion. The global energy price fluctuations, especially the tense situation in the European natural gas market, could pose significant risks to this cooperation.
The Belt and Road Initiative continues to provide new opportunities for China-France cooperation in 2024. France officially joined the logistics network of the China-Europe Railway Express, aiming to strengthen trade ties with China through this project. It is expected that the China-Europe Railway Express will generate more than €3 billion in trade revenue for France throughout 2024. However, there are differing opinions within France, with some critics arguing that excessive reliance on China’s logistics network could weaken France’s economic autonomy.
Regional Economic Integration
In 2024, China and France made significant progress in regional economic integration. In the first half of the year, the total investment in regional cooperation projects between China and France reached €4.2 billion, up 12.5% from the same period last year.
One of the most notable projects is the high-speed railway construction in southern France, in which China is participating. The total investment in this project is expected to exceed €1.5 billion, jointly undertaken by China Railway Group Limited and France’s Alstom. This project aims not only to enhance the transportation infrastructure in southern France but also to promote regional economic growth through increased connectivity. The French Minister of Transport stated in an interview: “This is a landmark cooperation. It is expected that by the time the project is completed in 2027, the GDP growth rate in this region will increase by 0.8%.“
In 2024, France officially joined part of the RCEP (Regional Comprehensive Economic Partnership) cooperation mechanism advocated by China through a bilateral agreement. Although France is not an RCEP member, through cooperation with China, France has been able to participate in regional cooperation in emerging fields such as the digital economy and green technology. Huawei and France’s Schneider Electric jointly established a smart manufacturing demonstration base in Paris, which is expected to generate about €2 billion in economic output for France by 2025.
In 2024, several think tanks in France released reports pointing out that France might face the risk of “economic dependence” by participating in China-led regional cooperation. These reports mentioned that trade and investment cooperation between France and China has grown by 15% over the past three years.
In the field of renewable energy, one significant project of China-France cooperation is the construction of a large wind farm in southwestern France. This project is jointly invested by the State Grid Corporation of China and EDF, with a total amount expected to exceed €800 million. The first phase of the project was completed in April 2024, and it is expected to be fully operational by 2026, providing approximately 1.5 billion kilowatt-hours of clean electricity to France each year. The project’s advancement has also encountered opposition from some environmental organizations, who are concerned that large-scale wind power infrastructure could negatively impact the local landscape and ecosystem.
Future Partnership
According to the latest forecast data for 2024, the China-France bilateral trade volume is expected to reach $85 billion by the end of the year, up 10.4% from $77 billion in 2023.
In the high-tech field, a major breakthrough in China-France cooperation in 2024 is the deep cooperation between French telecom giant Orange and China’s Huawei in 6G technology. The two parties signed an agreement worth €2.5 billion, planning to jointly develop the next generation of communication technology over the next three years. According to data from the French technology industry, this cooperation is expected to directly create 6,000 new jobs and enhance France’s position in the global communications technology field.
In the field of renewable energy, the total investment of this project is as high as €3.2 billion, and it is planned to be completed within the next five years. The project will generate approximately 1.8 billion kilowatt-hours of clean electricity each year, which can provide energy for more than 5 million households. According to predictions by the International Energy Agency, once fully operational, this project will reduce carbon dioxide emissions by 14 million tons annually.
Earlier this year, China’s Alibaba Group and France’s luxury goods giant LVMH reached a strategic cooperation agreement, which is expected to generate over €1.5 billion in sales for LVMH through the Alibaba platform in the next three years. According to a report by the French Institute of International Relations, future economic cooperation between China and France needs to focus more on strategic mutual trust and policy coordination to cope with global market uncertainties. In a public speech in 2024, French President Macron mentioned: “We welcome in-depth cooperation with China, but it must be based on fairness, transparency, and mutual benefit. We must promote international cooperation while ensuring national interests.“