Sporting chance to energize overseas trade
Chinese and French companies taking an interest in each other’s markets
China and France are set to strengthen economic ties by diversifying cooperation and increasing investment in each other’s markets, thanks to complementary industrial structures and the growth of the Belt and Road Initiative, said market watchers and corporate heads.
French and European companies have great confidence about the future in China. Moreover, many intend to expand activities here and continue growth, said Christophe Lauras, president of the French Chamber of Commerce and Industry in China.
According to a survey conducted by CCI France Chine between Jan 31 and Feb 17, in which a total of 305 companies responded, members of the chamber reported a greater willingness to expand their activities in China over the next three years.
The results showed that up to 47 percent of respondents are planning to increase their investment in the country, which is a significant increase from 23 percent reported in the chamber’s last survey in September 2022.
The survey also found that almost two-thirds of respondents expect their turnover to increase in China this year.
About 22 percent expect it to remain unchanged, and 14 percent expect it to decrease.
Up to 80 percent of members plan a visit to their Chinese headquarters this year.
With more than 2,100 subsidiary companies employing close to 445,000 people, France is the top European investor in China by the number of companies. With its 1,600 members, CCI France Chine has represented the interests of French companies since 1992.
Eager to seize more market share in China, French sporting goods retailer Decathlon is upping the ante in China’s sports market as consumers pursue healthier lifestyles.
With the government’s push for a healthier population and people’s soaring interest in sports, the sports industry in China is undergoing a transformation and the demand for sporting equipment and services is rising steadily.
To cater to this, Decathlon China recently organized the campaign “Sport to Paris” together with the French embassy in Beijing and related French consulates in China.
The event, which is being held in seven cities including Shenzhen, Beijing and Shanghai, demonstrates the health benefits of various sports such as paddleboarding, running, balance biking, skateboarding, cycling and hiking.
“The government’s strategy of ‘Fitness for All’ has gained great popularity. It has resulted in not only the improvement of people’s awareness of sports and health but also the diversification and upgrade of sports consumption,” said Servando Quevedo Gonzalvez, vice-president of Decathlon China.
The executive said the sports chain has developed both entry-level products and middle to high-end professional-level equipment to meet the diverse needs in the Chinese market.
Moreover, he noticed that there are many untapped niche markets. In addition to traditional sports, such as football, badminton and swimming, emerging sports such as camping, flying disc, paddleboarding and skateboarding have attracted attention from a wider audience.
This is an indication of the improving national economic level in China and the public demand for a highquality life.
Taking paddleboarding as an example, he said, it has shown explosive growth in China and families with children have gradually become the main consumers of paddleboards.
China’s sports industry has shifted from the traditional model of sports manufacturing to a multi-structural model, including production, service and consumption, said Zhou Xing, North China markets leader at the China branch of global consulting company PricewaterhouseCoopers.
According to the 14th Five-Year Plan (2021-25), the total production value of China’s sports industry is expected to reach 5 trillion yuan ($726.8 billion) by 2025 with sports consumption exceeding 2.8 trillion yuan.
Wei Jianguo, vice-chairman of Beijing-based China Center for International Economic Exchanges, said that in recent years, developing the relationships with France has been successful for China’s relations with Western countries due to its strategic, stable and mutually beneficial nature.
“The two sides should work in a spirit of having no time to lose to resume their three high-level dialogue mechanisms focused on strategy, finance and culture,” he said.
He added that both sides should start organizing commemorative events as early as possible, as 2024 marks the 60th anniversary of ChinaFrance diplomatic ties.
Wei said both sides need each other’s markets in the agriculture and food sectors, and they should “talk and work in two ways for achieving mutual benefit”.
He also envisioned greater teamwork in the aviation sector, the prevention and treatment of emerging infectious diseases and the training of scientific personnel.
Eyeing global expansion, especially in developed countries, Chinese companies have started to integrate overseas investments with the development of global industrial and supply chains, particularly in areas where China has a competitive advantage such as new energy vehicles and green power generation, said Lu Jinyong, a professor specializing in overseas development at the University of International Business and Economics in Beijing.
As the race to achieve net-zero carbon emissions is redefining the world’s energy makeup, Envision AESC, the battery unit of the Shanghai-based green technology company Envision Group, will produce 9 gigawatt-hours of batteries in 2024 and 24 GWh by 2030 in France.
It also pledged to create 1,000 local jobs by 2024 and 2,500 by the end of the decade. It said investment in France will make its battery factory the first “gigafactory” in the country.
With three battery production bases located in Japan, the United States and the United Kingdom, Envision AESC is building the second phase of its battery production and innovation base in China’s Wuxi, Jiangsu province. With an estimated annual production capacity of more than 15 GWh, the project is scheduled to come on stream later this year.
Envision Group CEO Zhang Lei said the company’s expansion into France takes into consideration France’s economic scale, continuous investment in the green revolution and China-France economic ties.
While European Union businesses, which have a strong presence in China, are bullish about the Chinese market, Chinese business communities are optimistic about business opportunities in France.
Zhang said the first phase of development in Europe will unlock future large-scale investment to grow the local supply chain and develop the whole life cycle opportunities of batteries. This includes energy storage, battery reuse, smart charging and closed loop recycling.
Despite facing challenges in the external environment, China’s nonfinancial outward direct investment jumped 35.7 percent year-on-year to 136.04 billion yuan in the first two months of 2023, data from the Ministry of Commerce showed.