عربي English Türkçe اردو فارسى
Logo
Latest News
Business

China Wants More Investment from French Firms, Xi Tells Macron

China's President Xi Jinping (L) arrives for the APEC Economic Leaders' Retreat, during the annual Asia-Pacific Economic Cooperation conference at the Moscone West Convention Center in San Francisco, California, USA, 17 November 2023. (EPA)
China's President Xi Jinping (L) arrives for the APEC Economic Leaders' Retreat, during the annual Asia-Pacific Economic Cooperation conference at the Moscone West Convention Center in San Francisco, California, USA, 17 November 2023. (EPA)
TT
TT

China Wants More Investment from French Firms, Xi Tells Macron

China's President Xi Jinping (L) arrives for the APEC Economic Leaders' Retreat, during the annual Asia-Pacific Economic Cooperation conference at the Moscone West Convention Center in San Francisco, California, USA, 17 November 2023. (EPA)
China's President Xi Jinping (L) arrives for the APEC Economic Leaders' Retreat, during the annual Asia-Pacific Economic Cooperation conference at the Moscone West Convention Center in San Francisco, California, USA, 17 November 2023. (EPA)

China wants more French companies to invest in the country and hopes France will provide a fair business environment for Chinese firms, President Xi Jinping said on Monday, while France also called for fair rules for foreign companies in China.

Xi made the comments in a phone call with French President Emmanuel Macron, Chinese state television reported, seeking to strengthen ties with its European trading partner after Macron visited China in April.

China faces an electric vehicle subsidy investigation by the European Union and a looming probe into its steelmakers. Meanwhile, several European countries have complained about China's opaque laws and rules regarding foreign companies in the country.

"China is willing to maintain high-level exchanges with the French side," Xi said, adding that he welcomed more French products entering the Chinese market.

Macron's office said the opening of the Chinese market should go hand-in-hand with fair competition rules for foreign companies.

Asked whether France had made progress to counter Chinese plans to force French cosmetics companies to share manufacturing secrets with Chinese parties, a French presidential adviser said it was a major issue that Macron had raised himself.

"It's an important point for us, considering what's at stake for French companies," the adviser said.

Macron's office also said China had joined a French initiative called "Buildings Breakthrough" that sets a zero carbon emissions goal for the building sector for 2030.

Xi also said China was willing to strengthen cooperation with France at the United Nations and other multilateral institutions. China took over the presidency of the UN Security Council (UNSC) this month.

The leader of the world's second-largest economy also called on France to play a constructive role in promoting the positive development of China-EU relations, as ties have been strained over issues ranging from the EU's push to reduce supply chain reliance on China to the war in Ukraine.

"China and the European Union should remain partners for mutually beneficial cooperation," Xi said in the call.

The two leaders also exchanged views on the conflict in Gaza, and agreed that it was imperative to avoid a further deterioration of the situation, in particular an even more serious humanitarian crisis, state television reported.

The French presidential adviser said China, as a member of the UN Security Council, should contribute more to UNRWA, the UN Palestinian refugee agency than the $1 million it currently gives every year.

"We encourage the Chinese authorities to do much more," the adviser said.

Most Viewed

 
 
Business

IMF Sees Modest Global Growth Over Next 2 Years

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
TT
TT

IMF Sees Modest Global Growth Over Next 2 Years

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. REUTERS/Yuri Gripas

The global economy is set for modest growth over the next two years amid cooling activity in the US, a bottoming-out in Europe and stronger consumption and exports for China, but risks to the path abound, the International Monetary Fund said on Tuesday.

The IMF warned in an update to its World Economic Outlook (WEO) that momentum in the fight against inflation is slowing, which could further delay an easing of interest rates and keep up strong dollar pressure on developing economies.

The IMF kept its 2024 global real gross domestic product growth forecast unchanged from April at 3.2% and raised its 2025 forecast by 0.1 percentage point to 3.3%.

The forecasts fail to shift growth from the lackluster levels that IMF managing director Kristalina Georgieva has warned would lead to “the tepid twenties.”

But the revised outlook reflected some shifting sands among major economies, with the 2024 US growth forecast reduced by 0.1 percentage point to 2.6%, reflecting slower-than-expected first-quarter consumption.

The Fund's 2025 US growth forecast was unchanged at 1.9%, a slowdown driven by a cooling labor market and moderating spending in response to tight monetary policy.

The IMF significantly hiked its China growth forecast to 5.0% - matching the Chinese government's target for the year - from 4.6% in April due to a first-quarter rebound in private consumption and strong exports. The IMF also boosted its 2025 China growth forecast to 4.5% from 4.1% in April.

But China's momentum may be sputtering, as Beijing on Monday reported second-quarter GDP growth of just 4.7%, significantly below forecasts amid weak consumer spending amid a protracted property downturn.

IMF Chief Economist Pierre-Olivier Gourinchas told Reuters in an interview that the new data poses a downside risk to the IMF forecast, as it signals weakness in consumer confidence and continuing problems in the property sector.

To boost domestic consumption, China needs to fully resolve its property crisis, as real estate is the main asset for most Chinese households.

“When you're looking at China, the weaker the domestic demand, the more growth is going to rely potentially on the external sector,” he said, inviting more trade tensions.

On a more positive note, the IMF slightly upgraded its 2024 eurozone growth forecast by 0.1 percentage point to 0.9%, leaving the bloc's 2025 forecast unchanged at 1.5%.

The eurozone has “bottomed out” and saw stronger first-half services growth, while rising real wages will help power consumption next year and easing monetary policy will aid investment, the IMF said.

It cut Japan's 2024 growth forecast to 0.7% from 0.9% in April due in part to supply disruptions from a major auto plant shutdown and weak private investment in the first quarter.

Also, the IMF warned of near-term upside risks to inflation as services prices remain elevated amid wage growth in the labor-intensive sector and said renewed trade and geopolitical tensions could stoke price pressures by increasing the cost of imported goods along the supply chain.

“The risk of elevated inflation has raised the prospects of higher-for-even-longer interest rates, which in turn increases external, fiscal and financial risks,” the IMF said in the report.

Gourinchas said that despite a fall in US consumer prices last month, the Federal Reserve can afford to wait a bit longer to begin cutting rates to avoid any inflationary surprises.

The IMF also warned of potential swings in economic policy as a result of many elections this year that could have negative spillovers to the rest of the world.

“These potential shifts entail fiscal profligacy risks that will worsen debt dynamics, adversely affecting long-term yields and ratcheting up protectionism,” the Fund said.

The Fund did not name US Republican Party candidate Donald Trump, who has proposed to impose a 10% tariff on all US imports, nor Democratic President Joe Biden, who has sharply hiked tariffs on Chinese electric vehicles, batteries, solar panels and semiconductors.

But it said that higher tariffs and a scaling up of domestic industrial policy could create “damaging cross-border spillovers, as well as trigger retaliation, resulting in a costly race to the bottom.”

Instead, the IMF recommended that policymakers persevere with restoring price stability - easing monetary policy only gradually - replenish fiscal buffers drained during the pandemic and pursue policies that promote trade and increase productivity.