Societe Generale's insights on Sino-France development
Following Chinese President Xi’s first foreign visit in 2019 and the signing of €40 billion business deals in France, Pierre-Yves Bonnet shared his views on what’s next for Sino-French business development.
What’s next for Sino-French development?
Chinese President Xi Jinping completed his first foreign visit in 2019 to France, Italy and Monaco in Europe from 21-26 March. The visit to France was seen as a salute to the 55th anniversary of establishment of diplomatic relations between the two countries.
Over the years, France and China have built close business and trade ties in. France has now become China's fourth largest trading partner in the European Union, the fourth largest origin of actual investment, while China is France's largest trading partner in Asia and the sixth largest in the world.
During President Xi’s visit, China and France signed 15 business deals totaling about €40 billion (US$45 billion), including an order from China for 300 Airbus planes and other deals ranged from the renewable energy sector to shipping and banking as well as Beijing’s agreement to lift an embargo on French poultry.
According to Wei Yao, Lead Economist of Asia-Pacific and Chief China Economist, “The President’s visit illustrates again Chinese policymakers’ strong commitment to open up the economy further, to work with the world, and to seek prosperity together. If the promised reform of further improving domestic business environment persists, we can see significant increases in foreign investments in China in the coming years, which will also help China rebalance its economy further towards consumption and become more productive.”
Pierre-Yves Bonnet, Group Country Head and Chairman for Societe Generale China who joined the trip among other business leaders, alongside Frédéric Oudéa, Chief Executive Officer of Societe Generale, also shared his views on what’s next for Sino-French business development.
1. How do you see the business relationship between China and France in recent years?
Pierre: What I see in the past two years is that there are more positive dialogue and senior visits between France and China. They improved the cooperations in terms of quantity and quality with stronger commitment on both sides. China’s financial market is changing quickly, especially in recent years. The Chinese government has accelerated the pace of further opening up and reform, which can be seen in the recently announced Foreign Investment Law on 15 March in Beijing. The increasingly open and mature Chinese market will attract more foreign investments.
2. What opportunities do the deals struck between China and France bring to the economy and trade relationship between the two countries?
Pierre: It is very clear that China and France have a very deep relationship, dating back to the establishment of diplomatic ties more than fifty years ago. The world is changing fast and giving a new impetus to the relationship is paramount. This will probably involve a more encompassing and friendly approach in a fast-evolving European context. Seeing the deals signed and the clear willingness to foster broader cooperation is a very important signal for us. We are in a balanced approach, and we should promote a win-win situation, with all partners involved, notably the European Union.
3. What’re the implications of the new launched Foreign Investment Law in China?
Pierre: The Law is very positive and not only for the financial industry but also for all of the global companies who want to do businesses in China. It is a clear will from the Chinese authorities to succeed in attracting foreign investments.
The implementation of pre-entry national treatment and negative list management system for foreign investments will greatly reduce access restrictions while providing legal protection for foreign investors like Societe Generale, who is committed to promoting our strong positioning as a bridge between China and the world.
4. What are the opportunities for Chinese corporations in France?
With President Xi’s visit, we expect more European countries will welcome Chinese corporations to make investments in Europe, especially in France which benefits from its central location, excellent infrastructure, well trained workforce and good business climate.
Driven by the macro environment and leveraging our on-the-ground expertise in France and in many countries lining up the “Belt and Road Initiative”, Societe Generale has recently helped many Chinese companies realize their Investments, by advising and financing their acquisitions.