France rolls out red carpet for Chinese

French President Francois Hollande greets Liu Chuanzhi, founder of Chinese PC maker Lenovo Group, who led the visiting delegation of the China Entrepreneur Club at the Elysee Palace. [Photo/Provided to China Daily]

Top mainland business team sees bright spots amid Europe's economic gloom

No foreign business delegation was ever offered such a high-profile reception at the Elysee Palace as a group of Chinese entrepreneurs received recently.

French President Francois Hollande rolled out the red carpet for the first time for a group of 40 of China's wealthiest entrepreneurs who were on a week-long visit to France to explore business opportunities.

The VIP treatment was no surprise given the delegation's economic clout. It comprised members of the China Entrepreneur Club, an influential private association whose member companies have combined revenues in excess of 2 trillion yuan ($326 billion), or about 4 percent of China's GDP.

The entrepreneurs included Liu Chuanzhi, founder of China's largest PC maker Lenovo Group, Cao Guowei, chairman and CEO of Sina.com, Yu Minhong, president of New Oriental Education & Technology Group, and Guo Guangchang, chairman of the Fosun Group.

The arrival of Chinese entrepreneurs was seen as timely in France as the country is fighting an uphill battle against recession and an unemployment rate that has reached a 14-year high of 10.8 percent.

The visit also took place amid the trade dispute between China and Europe over solar panel exports that many feared could trigger a much wider trade war between two of the world's biggest trading blocs.

In a speech to the visiting entrepreneurs, Hollande reiterated France's willingness to attract more Chinese investment, which could help improve the French job market and enable its companies to expand in the global market.

"I want to create all the conditions to ensure Chinese companies can invest more in Europe, and particularly in France," he said.

China was the eighth-largest foreign investor in France last year, with 31 investment projects creating 645 jobs. However, Chinese investment in France represents only 4 percent of the total foreign investment in the country, far behind the United States (23 percent) and Germany (16 percent), according to Invest in France Agency, a government body that facilitates foreign investment in the country.

To balance investment and trade relations with China, Hollande mentioned several areas, including food, health and urban development, where China and France could increase cooperation.

"Europe needs China for its own growth and China needs Europe to develop its business and to gain access to the technology of tomorrow," Hollande said.

"The current rebalancing of Chinese growth in favor of domestic demand, and measures taken to increase the flexibility of its foreign exchange system, are in the interests of both China and Europe."

The Chinese business leaders agreed with these views and said they hoped their visit to France could help to create substantial business partnerships.

"Chinese entrepreneurs are interested in areas that are closely related to Chinese markets and consumers, such as retail, healthcare, agriculture and consumer products," said Lenovo's Liu, the head of the business delegation.

"We must find the sectors that our two countries have complementary advantages in. We are not capable of simply buying up an asset in France and waiting for its value to appreciate."

Huang Nubo, the chairman of Beijing Zhongkun Investment Group, says he is looking for French partners to manage his company's scenic real estate. The Chinese developer stirred controversy in Europe recently with his multimillion-dollar proposal to buy property in Iceland and develop it into a tourism resort.

"France is a country with extensive service resources and this is what China needs the most," he said at a breakfast meeting with French entrepreneurs. "So I believe we can find a lot of opportunities in this area."

Wang Wenjing, CEO of Yonyou Software Co Ltd, also says that there is "a great deal of unexplored potential" in France industrial and agricultural sectors that could provide the basis for future cooperation between China and France.

During their visit, the Chinese entrepreneurs also met French Foreign Minister Laurent Fabius, Vice-President of the French Senate Jean-Pierre Raffarin and executives from French corporate giants, including Schneider Electric, the Dassault Group, BNP Paribas and luxury fashion house Chanel.

Emmanuel Limido, president of France Emerging Enterprises, an organization that promotes two-way investment for French companies in international markets, especially in emerging markets, said that firm actions are needed to boost investment between France and China.

"We already had political understanding at the highest level on both sides," he said. "Now we need to get the companies to start talking and working directly with one another."

Peter Mandelson, former trade commissioner of the European Union, reassured the Chinese entrepreneurs that Europe is not in decline, and that China and Europe should be optimistic about future collaboration.

"Europe has gone through serious external shocks from which it is recovering. But that does not mean economic depression," he said.

He notes that governments should continue to provide open and stable markets in Europe, while China should address state domination of its economic growth and give private enterprises more space and freedom to develop.

However, not everyone in the Chinese delegation shared the optimistic views about Europe's economic prospects.

Xu Xiaonian, a senior economist at China's Europe International Business School, said that Europe's economy will continue to be in recession and that thorough structural reforms are needed to emerge from the current crisis.

"During our meetings in France, the officials and business leaders avoided talking about the key problems of the labor market and the welfare system," Xu says.

"In fact, the real problem is not the enterprises themselves. It is the business environment that has hindered economic recovery."

He notes that the current business environment in France does not allow more innovative companies to emerge due to high taxes and rigid labor laws.

Xu says that the French government must cut company taxes and initiate substantial reforms in its welfare system to make the country more attractive to foreign investors.