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 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 <0489.HK> and PSA Peugeot Citroen <PEUP.PA>, signed
a deal in which the Chinese car maker will buy a 14 percent stake as
part of a recapitalization 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 <AIR.PA> to extend a
deal to assemble A320 planes in Tianjin to 2025.
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 <SAF.PA>. Aerospace accounts
for 29 percent of French exports to China.
The other highlight of the deal signing was a set of nuclear energy
and liquefied natural gas (LNG) agreements involving French utility
EDF <EDF.PA>, nuclear engineering firm Areva <AREVA.PA>, China
General Nuclear (CGN) <GDNCP.UL>, Total <TOTF.PA> and CNOOC
<0883.HK> — all of which are already working on partnerships in
China.
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France trails far behind neighboring 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 totaled 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 relationship.
(Additional reporting by Marine Debliquis;
editing by Greg Mahlich
and Susan Fenton)
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