From ‘French Farms to Chinese Tables’: France’s Economy Minister Touts Trade Potential

By Lu Chen and Kelly Wang

In April 2023, China and France decided to build a “from French farms to Chinese tables” supply chain mechanism — it turned out to be a banner project for Sino-French cooperation, with France now China’s largest agricultural product import market and second-largest agricultural product trading partner in the EU.

But the trade development must not stop there: “We must go further and resolve our differences, especially on Cognac and Armagnac,” said Éric Lombard, French economy and finance minister.

Speaking to Caixin via a written interview in March, Lombard highlighted the scope for expanding trade, “vast potential” for bilateral cooperation in artificial intelligence (AI), and continuing to fight climate change. For the latter, the minister added that France welcomes Chinese investment in its green industries.

However, there are also issues that need addressing, such as the significant trade imbalance between the two nations and better market access for French companies.

Expanding trade

As of 2023, over 2,000 French companies were operating in China, which was also France’s second-largest goods trading partner, according to Lombard. French luxury goods, cosmetics, agricultural products, food, and pharmaceuticals have “long been popular in the Chinese market,” he said.

However, Lombard suggested that further moves could be taken to improve local market access for French firms.

While acknowledging progress had been made — citing the “from French farm to Chinese dining table” fast-track mechanism as one example — he said, “France is committed to ensuring French companies continue to operate in a favorable business environment while striving for a more balanced trade relationship with China.”

This is crucial for the long-term development of mutually beneficial trade, Lombard said.

In 2024, France’s trade deficit with China reached a record high of nearly 47 billion euros ($50.1 billion), the minister noted.

Chinese foreign ministry data showed that in the first nine months of 2024, Sino-French trade reached $58.3 billion, down 1.2% year-on-year, of which Chinese exports accounted for 56% and Chinese imports from France made up the rest 44%.

To help address the trade imbalance, France is actively welcoming Chinese investment. In 2023, 44 new Chinese investment projects were launched in France across various sectors, according to Lombard.

A key area of focus is green energy, as France pursues its green reindustrialization strategy, launched in 2023 to promote the creation of green industries and decarbonization of high-emission sectors.

Lombard pointed to France’s electric vehicle (EV) sector as an opportunity for Chinese capital. In one case, China’s XTC New Energy Materials (Xiamen) Co. Ltd. and French nuclear energy company Orano SA have partnered to produce battery cathode precursors, a critical component for EVs.

“France has ambitious goals for green reindustrialization, and we warmly welcome Chinese investments that support this strategy,” Lombard said.

China is France’s largest trading partner in Asia and seventh-largest globally, while France is China’s third-largest trading partner in the European Union, according to October data from the Chinese foreign ministry.

Climate cooperation

Addressing climate change is a priority in Sino-French cooperation. During President Xi Jinping’s state visit to France in May 2024, and subsequent meetings between the countries’ foreign ministers, both China and France have reaffirmed their commitment to tackling global climate issues.

This year marks the 10th anniversary of the signing of the United Nations Paris Agreement on climate change, in which over 190 parties pledged to limit global average temperature rise to “well below” 2 C above pre-industrial levels. However, challenges persist — particularly in climate financing in recent years.

At a Group of 20 ministerial meeting in February, Enoch Godongwana, the finance chief from host country South Africa, highlighted disagreement over climate financing as one of the reasons that prevented countries from reaching a joint communique.

Lombard echoed these concerns, warning of the risk of “backsliding on our agenda” but also stressing that “we must not give up.” Over the past decade, France has more than doubled its climate financing for developing nations, mobilizing an annual average of 7 billion euros between 2021 and 2023, he told Caixin.

For bilateral cooperation, Paris hopes to leverage its decades-long collaboration with Beijing in nuclear energy as a model for broader energy transition partnerships, Lombard said.

AI potential

In February, Paris held the AI Action Summit, during which France emphasized the opportunities presented by artificial intelligence (AI) rather than focusing solely on its associated risks.

At the summit, more than 60 countries including France and China signed a joint declaration advocating for an “open, multi-stakeholder, and inclusive” AI governance model.

Lombard commended China’s active role at the summit and highlighted the “vast potential” for Sino-French collaboration in developing a “sustainable and responsible AI,” especially in governance and oversight. “A balanced regulatory framework is essential to reassure both investors and consumers, ultimately fostering industry growth,” he added.

Beijing has said on multiple occasions that it welcomes cooperation with other countries in advancing global AI governance.

Contact reporter Kelly Wang (jingzhewang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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