According to French statistics, in 1992 China achieved a trade surplus with France of 11.1 m Francs (approx US$2.1 m), with a credit rating of 39 per cent, which has essentially resulted in an almost exponential increase in Chinese imports. (Chinese statistics for the period have been calculated differently and state the volume of trade for 1992 to be US$2.2bn, with a deficit of US$733m. These figures . however include goods traded through Hong Kong, which is not their final destination.)
Since 1986, French imports have quadrupled in nominal value to Fr18.5bn (approx US$3.5bn) in 1992. More than 85 per cent of purchases were in industrial goods, of which consumer goods make up the vast majority: clothing (17 per cent), shoes and leather (14.2 per cent), games and toys (13 per cent) and electrical goods (9.5 per cent) in themselves form 53.7 per cent of France's imports.
French exports on the other hand, which totalled Fr7.4bn in 1992 have decreased in real terms since 1990. They are dominated by the professional goods sector (46.7 per cent of the total), notably energy (nuclear, thermal, and hydroelectric), telecoms and petrochemicals.
Many of these contracts have also benefited from French public systems. It is worth noting that among the main donors of bilateral aid, France occupies the second position behind Japan. More than Fr11.5bn was donated between 1985 and 1992, the dominant sectors in descending order being: energy, petrochemicals, cars, processing of metals and materials, telecoms.
In terms of current exports it is worth noting:
* the increase in France's sales of cars, rind ally in completely knocked down principally form, particularly utilitarian vehicles, spare parts and equipment. In 1992, this represented nearly 20 per cent of total exports. Citroen's recent contract to establish car plants in Wuhan and Xiangfan will gradually raise this figure.
* Exports of intermediary goods form about 20 per cent of French sales, with little variation every year.
According to Chinese statistics, in the period 1990-2, France has been placed at least tenth in the table of suppliers with a market share of 2 per cent. All the major industrialised countries are also in deficit: the USA with US$18.2bn and a credit rating of 29 per cent, Japan with US$5bn but a credit rating of 70 per cent, and Germany US$4bn and a credit rating of 47 per cent.
With an investment total of nearly US$600m, the figures undoubtedly underestimate French interest in China. There are two factors, for example, that must be taken into account – on the one hand the contracts that have been signed recently or that are likely to be in the automobile industry and the petrochemicals and chemicals industries. On the other, the purchase of foreign businesses by large French groups has swung investments from these businesses in China to within French perimeters.
French enterprises have been able to take a significant position in certain areas of the market, notably:
* Cars: the entry of Peugeot and Citroen into the market puts France in a stronger position for the production of vehicles. * Water production and treatment will develop in the medium term.
* Petrochemicals and chemicals: this sector will see important developments in the course of the next two or three years.
* Electrical distribution systems (medium and low tension).
* The agro-industry.
This report has been compiled with the kind assistance of the French embassy, Beijing, and the Comite France-Chine and the French Centre for Foreign Trade (CFCE) in Paris.
Philips's French subsidiary TRT has been present in China for a number of years.
As a result of the government's plans to upgrade its telecommunications, main lines capacity in rural areas is likely to grow from 3.3 to 10 million. This is a huge market where digital point to multipoint systems are likely to have a substantial share. Several of these systems have been supplied by TRT to different provinces since 1987. In view of the large potential market for this type of system, TRT is currently negotiating with one of the PTIC (post technical" support export cooperation) factories for a complete transfer of technology. In the field of microwave links, TRT equipment was chosen by Spar Aerospace of Canada with the approval in 1992 of the Ministry of Post and Telecommunications (MPT) in 1992. Several systems have been supplied by TRT to link the earth stations of SPAR's manufacture to the telephone exchanges in different cities in China. The equipment, which has a capacity of 14OMbit/s and uses 64 QAM modulations, was delivered to Montreal to be integrated with the equipment supplied by SPAR where it has been successfully tested by MPT representatives. The microwaves radio-links have now been installed in China by MPT staff.
A contract has also just been signed with China National Petroleum Corporation (CNPC) for the Tu Ha Oil field communications system. The system using the TDMA (time division multiple access) principle will provide voice and data transmission facilities to offshore platforms in the oil field. ISDN facilities will be supplied as soon as trade restrictions are lifted for this type of facility.
Rhone-Poulenc, the largest chemical and pharmaceutical company in France, is to establish a joint venture with a Chinese chemical factory in the port city of Qingdao, Shandong province.
The Sino-French joint venture is designed to produce 20,000 tons of precipitated silica, which can be used in the shoe, rubber tyre and tooth paste industries.
The project is to be co-financed by the Rhone Poulenc Group and the Qingdao Sodium Silicate Factory, China's largest sodium silicate production plant with an annual output of 56,000 tons. The investment total has not been disclosed.
The plant is to be operational in 1995, with its product planned to help meet China's growing demand for precipitated silica to feed rapid development of the shoe-making and rubber tyre industries and the large-scale production of tooth pastes. The 'v is likely to boost its production to explore export markets in the future.
In November 1992, Rhone-Poulenc entered an agreement on long-term co-operation with the Ministry of Chemical Industry during the visit of a senior delegation headed by J.M. Bruel, general manager of Rhone-Poulenc Group, reported the China Daily. The programme, consisting of 16 industrial projects currently under negotiation with Chinese counterparts, marks a change in Rhone-Poulenc's development strategy in China, switching from trade and technology transfer to joint manufacturing, says the report. The 16 projects, all joint ventures, are in the fields of basic chemical materials, fine chemicals, fibres and polymers, medicines, vaccines, agricultural feed and farm chemicals. *