French companies tap thriving market
Complementary investments in each other’s industries help soothe troubled world economy
China remains a pivotal and thriving market for French companies, with business executives highlighting the country’s commitment to sustainable growth and industrial advancement, which paves the way for additional investment opportunities and collaboration.
Driven by a growing population of affluent middle-income groups, China is positioned to emerge as one of the world’s largest and most dynamic markets for a wide range of goods, services and technologies. This is particularly true in sectors such as renewable energy, advanced manufacturing and digital technologies.
Numerous French multinational corporations have harnessed their capabilities and manufacturing operations worldwide to introduce the latest products and solutions to the Chinese market.
Sang Baichuan, dean of the Beijing-based University of International Business and Economics’ Institute of International Economy, noted that these businesses are not only selling goods to the domestic market but engaged in innovative solutions and production within China, expanding their reach to customers around the globe.
Echoing that sentiment, Matthew Ye, president and CEO for China at Michelin Group, a French tire and mobility company, said the company will expand its manufacturing facilities and produce more tires with recycled materials in China.
As one of the largest consumer markets in the world, China has always held a key business position for Michelin. The Chinese market is like a “stability anchor” for Michelin. It injects certainty and positive energy into a global economy full of uncertainties. The country also makes stable and important contributions to Michelin’s global business, said Ye.
As China’s reform and opening-up initiatives progress, this market is anticipated to sustain vigorous growth over the medium to long term. Michelin aims to align with this positive trajectory, pursuing efforts to stabilize and fortify its presence in the country, he added.
In addition to accelerating the process of digitalization and intelligence, enriching its business in China, Ye said the company will cooperate with more local partners and promote the high-quality development of the industry.
Michelin invested 200 million yuan ($28 million) to kick-start a project for the production of 1.3 million passenger car tires at its plant in Shenyang, capital of Northeast China’s Liaoning province, last year. Once completed, the annual production capacity of passenger vehicle tires at the plant will increase to 17.3 million units.
Local and international auto companies in China manufactured a record 30.16 million vehicles and delivered 30.09 million units in the first three quarters of 2023, up 11.6 percent and 12 percent year-on-year respectively, data from the Beijing-based China Association of Automobile Manufacturers showed.
Michelin’s sales in the global market exceeded 21 billion euros ($22.8 billion) in 2023. In the Chinese market, consumer tires, truck tires and other lines of business have achieved significant growth. Its market share is also gradually growing, according to information released by the French company.
“We expect to see more stable revenue growth as well as diversified business growth this year,” said Ye. “Our several tire business lines will launch new products this year and more new businesses beyond tires will come onto the stage. We look forward to providing a better mobility experience for Chinese consumers.”
Similar views were shared by Thierry Weulersse, CEO for China at Thales Group, another French industrial and technology conglomerate. “As the world’s second-largest economy, China is of strategic importance to Thales, for the size of its domestic market, dynamic economy and strong scientific, technological and innovation capabilities.
“As China and France celebrate the 60th anniversary of diplomatic ties this year, it is an important milestone for our bilateral cooperation, which we hope will bring exciting opportunities. The core markets that Thales operates in aerospace, digital identity and security all fall within brackets of the key industries of China’s growth direction,” said Weulersse.
Stressing that China is investing heavily in smart and green mobility, including air traffic solutions, airports and smart cities, he said Thales is well positioned to continue bringing significant added value to its Chinese customers in these sectors. It is doing this by leveraging its profound expertise, innovative technologies, international experience and a deep understanding of the local market, which contribute to the nation’s high-quality development.
Moreover, China’s electric vehicle market is the largest in the world and the share of new energy vehicles will continue to grow. This will also generate business opportunities for French companies like Thales.
China and France have more room to expand trade and investment, and deepen cooperation in such fields as high-end manufacturing, modern service, environmental protection, green development and new infrastructure-related businesses from the long-term run, said Sun Fuquan, vice-president of the Beijing-based Chinese Academy of Science and Technology for Development.
Unlike traditional infrastructure such as railways, roads and water conservancy, the concept of “new infrastructure” refers to critical facilities based on information technologies such as 5G, artificial intelligence, the industrial internet and the internet of things.
Eager to expand its market presence in France, Chinese technology company Huawei Technologies announced in late 2023 that it will put a plant into operation by the end of 2025. The total investment for this project is 200 million euros.
Zhang Minggang, deputy general manager of Huawei France, said that the plant, located in the city of Brumath in France’s northeast GrandEst region, will create 500 local jobs.
Huawei said in a statement in 2020 that the factory, its first overseas plant, aims to produce 1 billion euros worth of mobile network technology solutions and equipment for European customers annually.
The plant will also have a demo center, showcasing wireless base station production, software loading and testing processes. The facility will be open to carriers, governments and related authorities, demonstrating Huawei’s positive stance on Europe’s call for digital sovereignty.
The plant can help to drive the technical competitiveness of the European industry and boost the resilience of local supply chains as well as infrastructure, said Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association.
In a world marked by turbulence and transformations, the collaborative efforts of China and France in upholding multilateralism, fostering political mutual trust and reinforcing strategic coordination hold profound significance, said Gao Lingyun, a researcher at the Institute of World Economics and Politics, which is part of the Beijingbased Chinese Academy of Social Sciences.