CHINESE INFLUENCE ACTIVITIES IN FRANCE

Source: Larry Diamond, Senior Fellow The Hoover Institution, Stanford University  

Original Text has been edited

France is the Western European country with the most favorable disposition toward China historically, dating back to the establishment of diplomatic relations in 1964. Yet, it is also the EU country where current public opinion toward China is the most negative, overtaking Italy in 2017. As in other countries, it is difficult to distinguish between the voluntary exposure to influence, due to the French seeking to benefit from China’s rise, and active efforts by Beijing to exploit French vulnerabilities. Both the left and right in France have supported close ties with China. For the most part the left has been critical of US policy in Asia and supportive of China and Vietnam. France has taken the lead, with Germany and Italy, in calling for investment screening by the EU, a move that clearly targets Chinese attempts to obtain European high technology.

Diaspora

The Chinese diaspora in France is the largest in Europe, estimated to be between six hundred thousand and one million. The PRC embassy in Paris and consulates in Marseilles and Strasbourg have increased China’s outreach to the various Chinese communities in recent years.

Politics

China’s diplomatic buildings have sprouted up around Paris, sometimes acquired from French government sites on sale. China has cultivated a stable of former French politicians.

Civil Society

A new generation of NGOs linking French and PRC members and sponsors has emerged, complementing the traditional role of business. Most prominent is the France-China Foundation. With prominent PRC businessmen as cosponsors and old or new members of the French establishment, the foundation hosts social events, including at the Château de Versailles. Its strongest activity is a Young Leaders program. Other organizations include the Fondation Prospective et Innovation.

Business

France maintains a negative trade balance with China, and Chinese companies have not invested much in France compared to what they have poured into Germany, Italy, and the United Kingdom. Chinese investors reduced investments during 2016–17 and have also met with informal refusals in some cases, such as Areva, the French nuclear company. In mainland France, the Comité France-Chine of MEDEF, the French business union, has always been a prominent link. A separate French-Chinese investment fund has also been created. Until very recently, Sino-French activities were largely financed by major French firms operating in China, with EDF, the semipublic electricity company that cooperates on nuclear plants with China, being the most prominent. EDF has been criticized for its transfers of technology to China, which it justifies by its contracts in China and the United Kingdom with Chinese co-funding. This pattern of lobbying by the French themselves may be changing. Huawei now appears as a frequent donor, including for public conferences taking place in such prestigious locales as the French National Assembly or Senate. Quiet Chinese investments with ownership below the 10 percent declaratory level, as well as in real estate, make for more diffuse influence. This is particularly true at the local level, where Chinese investors are eagerly sought and business intermediaries tend to mushroom. Many plans for industrial parks and regional airports have not materialized, however. The partial takeover of the Toulouse airport (home of Airbus and other aerospace firms) has been marred by the temporary arrest in China of the lead Chinese investor and by a search for quick profits.

Academia

In general, French academic and scientific institutions have welcomed Chinese students and researchers. The Commissariat à l’Énergie Atomique (CEA), the École Polytechnique, and the Paris Saclay cluster and science park are all active in working with Chinese counterparts. The Paris Saclay cluster and science park has signed agreements with Tsinghua University and its commercial and high-tech spin-offs, Qinghua Holdings and Qinghua Unigroup. The Fondation Franco-Chinoise pour la Science et ses Applications, cofounded by the French and PRC science academies, promotes stays in France for Chinese scientists. It does not list any Chinese sponsoring firm. Huawei has been a major donor to the Institut des Hautes Études Scientifiques, France’s famous mathematics institution. The Fondation Victor Segalen is a partnership between a French business school, ESCP, and China’s NDRC, and is sponsored by Huawei and a roster of French firms. Among the recent spate of Belt and Road Initiative conferences, one at IRIS, a Paris-based think tank, was sponsored by the PRC embassy in France.

Media

The PRC now controls the only Chinese-language print media in France. Its TV channels (plus the Hong Kong–based Phoenix TV) are the only Chinese-language channels carried to France and its overseas territories. In the French-language media, China does not have a very strong position and the country’s officials deplore what they believe is negative reporting by French reporters. The PRC has had more success with the publishing world, where several authors have appeared praising the Chinese model.

China Pros and Cons

On the one hand, there is a notionally “pro-Chinese” camp, whose representatives speak favourably about China and even maintain certain ties with the it. Strange as it may seem, this view is shared by many retired and active politicians. There are also pro-Chinese politicians to be found among France’s right-wing politicians. Several former politicians of different affiliations, including former ministers, are now employed by Chinese companies. Both houses of the French parliament have France–China friendship groups..

On the other hand, there is the camp of anti-China “alarmists”, which is wary of Beijing’s growing influence.

According to the French treasury and customs service, there is a massive imbalance in bilateral trade in favour of China. In 2017, Beijing purchased 19 billion euros’ worth of French commodities (4 percent of all French exports, which put China in the seventh place among France’s key foreign customers), but exported 49 billion euros’ worth of goods to France (9 per cent of all French imports, making Beijing the country’s second largest supplier). Interestingly, no other country in the world demonstrates such an imbalance in its trade with France. France’s overall share of the Chinese market is relatively low at 1.5 percent (mainly present in China’s aerospace, electronics, agricultural, chemical and luxury sectors).

According to the French Embassy in Beijing, there are 1100 French companies operating in China which have generated a total of 570,000 local jobs. In France, the 700 Chinese and Hong Kong businesses support just 45,000 jobs. The possibility of France’s strategic economic sectors falling into the Chinese hands may not appear to be as much of a problem as it is in Italy and Germany at the moment, but there are certain preconditions for this (given China’s sustained interest in the Port of Marseilles, DongFeng Concern’s participation in Groupe PSA, etc.). Chinese investment in France grew by 86 per cent in 2018, with the highest growth reported in the hi-tech sector. The French government expects to be able to resist this “plunder” by way of expanding the scope of the 2014 Montebourg Decree, under which any investment in France’s strategic sector is to be approved by the government.

Second, France is extremely wary of potential Chinese espionage (including, but not limited to, industrial espionage). In October 2018, the media picked up Le Figaro’s investigation, which had concluded that Chinese secret services were actively using fake social network accounts to make contact with French public servants and employees of key healthcare, IT and nuclear enterprises. Promising candidates would be offered remuneration for their cooperation and an opportunity to visit China “for a conference or seminar.” In this context, it is worth noting that France is home to the largest Chinese community in Europe (approximately 600,000 people), which is hard for the French authorities to penetrate and may potentially be used by Chinese diplomats and secret services “for the acquisition of political, scientific, technological and commercial intelligence.”

The French leadership believes that, if China agrees to let the country into its domestic market and also develops the Belt and Road Initiative on the basis of reciprocity, then this will somewhat correct the trade imbalance currently observed between the two countries. Accordingly, the vision is that Chinese capital penetrating the EU economy could be both curtailed in France and somehow made up for by similar activities in China. Exports to China are of particular importance to French companies at present, as the national economy is still recovering from years of stagnation.

China’s own interest in cooperation with France is understandable. France wields some political weight in the European Union. It is the European Union’s second largest economy with diverse industry, technology and major ports. From the point of view of the Belt and Road Initiative, it is logical to use France as another “entry point” to Europe and the Mediterranean. On a global scale, it would definitely not hurt Beijing to get close to another permanent member of the UN Security Council and a nuclear power.