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China to buy 60 Airbus planes from France

Agreement comes as French President Francois Hollande begins two-day visit to China in bid to bolster economic ties.

Last Modified: 25 Apr 2013 20:45
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Hollande is expected to have three meetings with Xi, including a state banquet [Reuters]

China has agreed to buy 60 Airbus planes under a memorandum of understanding signed in Beijing by French President Francois Hollande and Chinese President Xi Jinping.

A significant portion of the planes will be manufactured in China at an Airbus factory in Tianjin, 150km from the capital, an industry source told the AFP news agency on condition on anonymity.

The signing ceremony on Thursday took place in the Great Hall of the People during the first day of Hollande's two-day visit to the country aimed at boosting trade.

While exchanging greetings with Xi, Hollande, who arrived earlier with a number of French business people, said: "Today there is a trade imbalance and it behooves us to fix it, not to reduce our investments and our exports but to increase them.

"This is what we will discuss during our meetings."

Xi told Hollande: "You are working actively to promote growth and increase competitiveness.

"I look forward to the future of our global strategic partnership and look forward to working with you to make our bilateral relationship closer, healthier and more vibrant."

Hollande is the first head of state from a major Western nation to meet with Xi since he became China's head of state last month.

Boosting trade

France accounts for just 1.3 percent of China's foreign trade compared with around five percent for Germany, and a trade deficit with China of $34bn last year is seen in Paris as unsustainable.

But reversing this will not be easy for a country that lacks Germany's strength in the production of capital goods or export-driven business culture.

Aides to Hollande believe the Chinese yuan is seriously undervalued and expect the issue to be raised during his two-day visit, albeit without much hope of significant progress.

In industrial terms, France's highest value cards are its share in Airbus and its nuclear expertise. 

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.

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

France is also pushing for greater access to the Chinese market for its charcuterie, or cooked pork meat, producers.

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

For Hollande, beset by economic woes and the aftermath of a corruption scandal that forced his budget minister to resign, the trip is a break from domestic troubles.

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