Hollande leaves domestic woes behind for sales trip to China

PARIS (AFP) - French President Francois Hollande, accompanied by a high-powered business delegation, starts a two-day visit to China on Thursday, with trade rather than geopolitics at the top of the agenda.

For Mr Hollande, beset by economic woes and the aftermath of a damaging corruption scandal that forced his budget minister to resign, it will be a welcome break from his domestic troubles.

He will be the first foreign leader to be received in Beijing by new Chinese President Xi Jinping.

For both leaders it will be an opportunity to bask in the international limelight in the company of their respective partners, both feisty, independent first ladies.

But Mr Hollande will be accompanied by a planeload of French businessmen hoping to lay claim to a bigger share of the fruits of China's economic growth.

As things stand, France has been outstripped in that respect by its neighbour Germany and French pride has been particularly stung by the fact that its renowned food producers have made only modest inroads into the booming market created by China's emerging middle class.

"China has more or less got what it wants from the bilateral relationship, but France has so far struggled to reap the rewards of Chinese growth," said Mr Jonathan Holslag, an expert on Sino-European relations at the Free University of Brussels.

That broad-brush analysis is borne out by figures that reveal that while Germany accounts for around five per cent of China's foreign trade, the equivalent figure for France is 1.3 per cent.

A trade deficit with China of 26 billion euros (S$42 billion) last year is seen as unsustainable in the corridors of power in Paris.

But reversing it is not going to be easy for a country that does not have Germany's strength in the production of capital goods or its export-driven business culture.

Aides to Mr Hollande believe the Chinese currency, the yuan, is seriously undervalued and expect the issue to be raised during the president's visit, albeit without much hope of significant progress.

"It is not as if you can wave a magic wand and fix the deficit but the relationship can be rebalanced," one official said.

In industrial terms, France's highest value cards are its share in the planemaker Airbus and its nuclear expertise, and officials anticipate Mr Hollande's visit bringing progress on both fronts.

Hopes are high that French nuclear giant Areva and the Chinese energy group CNNC will sign letters of intent on the construction of a nuclear waste treatment facility while Airbus is hoping to tie down some orders from Chinese airlines.

Carmaker Renault, meanwhile, hopes to progress negotiations on a proposed factory at Wuhan that would produce 150,000 vehicles per year.

On the food front, France is pushing hard for an accord that will grant its charcuterie producers the kind of access to the Chinese market that Italian salami manufacturers already enjoy.

The recent horsemeat scandal, which exposed problems with the traceability of meat used by French meat processers and frozen food producers, has not helped Mr Hollande's cause on that score, but officials remain optimistic about the prospects of a deal.

Mr Hollande is expected to have three meetings with Mr Xi, including a state banquet on Thursday and a more intimate lunch on Friday in the company of their respective partners, Ms Valerie Trierweiler and Ms Peng Liyuan.

Both women are credited with supplying their career-politician other halves with a touch of high cheek-boned glamour.

Twice-divorced former journalist Ms Trierweiler made waves in France by winning Mr Hollande away from the mother of his four children while Ms Peng, a popular soprano who carries the rank of general, was until recently far better known than Mr Xi.