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France and China sign deal to work together in emerging economies

© Dominique Faget, AFP | French Prime Minister Manuel Valls (pictured right) shakes hands with Chinese Prime Minister Li Keqiang in Paris on June 30, 2015

Text by NEWS WIRES

Latest update : 2015-07-01

China and France's plan to team up on projects in Africa and Asia is a win-win deal that will "serve the interests of all", Chinese Prime Minister Li Keqiang said Wednesday.

In recent years, China has muscled out Western nations from emerging economies, especially in Africa, but appears to be changing tack with the deal which was signed Tuesday and branded as "historic" by French Prime Minister Manuel Valls.

The agreement, which was signed on a high-level three-day visit by Li to France, will see the two nations work together on infrastructure and energy projects and introduce "new forms of co-contracting, co-production and co-financing."

"Let us work together to help improve infrastructure, industrialisation, poverty reduction. Doing that will serve the interests of all of us," Li said in a speech at the headquarters of the Organisation for Economic Co-operation and Development (OECD) in Paris.

"It will help developing countries gradually move towards prosperity, it will help China find a market for its production capacity and also force China into upgrading its own industries domestically.

"China will also be able to learn from developed countries in this process and make itself more succesful in reducing energy consumption."

China, which has too many factories and is struggling with a slowdown in domestic demand, is pushing its companies to seek new markets abroad.

According to the deal, the countries will also jointly produce civilian aircraft for sale to countries in Africa and Asia and co-operate in the agriculture and transport industries.

"Projects fitting into the global fight against climate change will also be encouraged," reads the accord.

Financial power vs know-how

"It is win-win," said a French official. "The Chinese have financial power, we have the know-how."

China has become Africa's largest trading partner in recent years where it has carried out massive infrastructure projects and its economic growth has been fuelled by natural resources from the continent.

But with Africa being home to seven of the world's fastest-growing economies, other Western nations are vying for a slice of the pie.

"In Africa the idea is not to have our markets taken away from us, we remain vigilant," said the French official, adding that China is also counting on France to help improve its often negative reputation on the ground in Africa where "they are not liked".

In Asia, the deal will allow for the opening of new markets for France, which is struggling to revive a moribund economy.

Li said China could also work with other Western nations to create growth in developing countries.

The premier said some six billion people lived in developing countries, a "huge market" which could not always afford the industrial equipment needed to spur growth.

While China could provide affordable equipment, he said emerging economies would also need more advanced technologies and Beijing was therefore looking to "form joint ventures or co-operatives" with the developed world.

Providing better quality products to poorer countries would "also help us meet targets of reducing energy consumption," he added.

Development advice

The Chinese premier said his country was hoping for "policy advice and recommendations for China's modernisation drive" after joining the OECD's development centre which brings together rich and developing countries who share knowledge and advice on stimulating growth.

He said while China was the world's second biggest economy, it still ranked only 80th in terms of GDP per person, at $7,589.

Although China had managed to lift 600 million people out of poverty, by UN standards 200 million people were still living in poverty – "the population of France, Germany and the UK combined," he said.

"Our goal is that by the middle of this century China will enter the ranks of the mid-developed countries.

"China's development cannot be achieved without the rest of the world. That is why we need to promote global cooperation on production capacity."

(AFP)

Date created : 2015-07-01

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