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China, France to reduce trade imbalance

Zhao Yinan
Updated: Jan 29,2015 11:19 PM

China and France reinforced their ties with new deals in nuclear power, aviation and ecological protection on Jan 29, with the two sides promising to reduce Beijing’s widening trade gap with Paris.

The agreements, signed after Premier Li Keqiang met with visiting French Prime Minister Manuel Valls, will see the two countries join forces to design nuclear power stations and cooperate with maritime satellites. They will also jointly develop a wetlands park in North China’s Shanxi province, in addition to other cooperation.

“Economic ties between China and France remain as the cornerstone of bilateral ties,” Li said at a news conference after the meeting. “China is not purposely pursuing a trade surplus with France.”

Trade volume between the countries reached $51 billion in 2012. That figure was reduced to $49.83 billion in 2013.

A multibillion-dollar trade deficit with China is seen in Paris as unsustainable. In the first 11 months of 2014, the China surplus accounted for nearly 40 percent of France’s total trade deficit.

Li called for more cooperation between Beijing and Paris in nuclear power, aviation and high-speed railways, as well as in medical care, ecological protection and finance.

He urged France to lift restrictions on high-tech products exported to China and to offer an easier business environment for Chinese investors in France.

Valls, on his first visit to China as prime minister, said one important goal of China-France economic cooperation is to rebalance the large trade deficit, and he called for more access by China to French products and more Chinese investment in France.

“A single message for Chinese enterprises: France welcomes Chinese investment,” Valls said at a media briefing after the meeting.

“As we commemorate the past, we are happy to build a brighter future,” he said. “There are no real obstacles to further Sino-French cooperation.”

Valls said France issued its first government debts denominated in yuan earlier on Jan 29, a move to push relations ahead on the financial front. Paris is one of a handful of European cities with a yuan clearing service.

Cai Fangbai, former Chinese ambassador to France, said China’s links with the country had transcended the “simple buy-and-sell relationship”.

He said France is looking forward to stronger economic ties with the world’s second-largest economy to shake off a long-standing slow economy.

French economy has been stagnant for three years, as investment and job creation declined under a high tax burden. Its economy expanded 0.4 percent in 2014 and is expected to accelerate to 1 percent this year with lower oil prices and a cheaper euro.

As the world’s top tourist destination, France has an ambitious goal to welcome 5 million Chinese visitors annually by 2020.

Before the meeting with Li, Valls visited an Airbus factory in Tianjin to kick off his three-day visit celebrating 50 years of diplomatic relations.

Valls is expected to meet President Xi Jinping on Jan 30, before delivering a speech on competitiveness and reforms and visiting a Beijing exhibition of work by the French sculptor Auguste Rodin, accompanied by Li. He will fly to Shanghai to meet Chinese and French businesspeople on Jan 31.