Macron has no interest in ‘decoupling’ from China

French President Emmanuel Macron’s recent state visit to China has been sharply criticized for its failure to deliver progress on peace in Ukraine but perhaps that wasn’t truly atop Macron’s Beijing agenda.

The high-profile trip did, however, deliver agreements to expand Airbus’ and other French companies’ business in China – a significant development for France’s economy and its independent diplomacy and a notable setback for Boeing and US efforts to hamstring China.

Airbus CEO Guillaume Faury, one of about 60 French executives who joined Macron’s entourage, signed an agreement with the Tianjin Free Trade Zone Investment Company and Aviation Industry Corporation of China to establish a second A320 assembly line at the Airbus factory in Tianjin. The signing ceremony, held on April 6, was witnessed by Macron and Chinese President Xi Jinping.

Tianjin is one of four A320 Family final assembly sites worldwide. The others are located in Toulouse, France, Hamburg, Gernany and Mobile, Alabama in the US. The Tianjin factory has delivered more than 600 A320 aircraft since it began operations in 2008.

The A320 Family is a series of narrow-body (single-aisle) passenger jets. First introduced in 1988, it now outsells the Boeing 737.

The first A321neo assembled in Tianjin was delivered in March 2023, broadening the product line. The A321neo is the longest-fuselage aircraft in the A320 line, seating 180 to 220 passengers in a typical configuration.

Airbus also signed an agreement with the China Aviation Supplies Holding Company (CAS) covering the purchase of 160 passenger jets.As previously announced, this includes 150 A320 Family and 10 A350-900 widebody aircraft already on order.

There had been some optimism regarding additional sales of Airbus cargo and wide-body long-haul passenger aircraft to China, but a decision was deferred pending further study of the “needs of Chinese airlines, depending on the recovery and development of China’s air transport market and fleet,” according to an official statement.

In addition, Airbus signed a memorandum of understanding with the China National Aviation Fuel Group (CNAF) to step up cooperation in the standardization, production and use of sustainable aviation fuels.

Last September 2022, Airbus and CNAF agreed to support the use of sustainable fuels on flights in China. By the end of March, 18 such flights had been made. By 2030, the companies hope that sustainable fuels will account for 10% of total aviation fuel consumption in China.

Airbus expects China’s air traffic to grow at an average annual rate of 5.3% for the next two decades, outpacing the world average of 3.6%. In its calculation, this should lead to demand for 8,420 aircraft between now and 2041, or more than 20% of projected future global aircraft sales.

At the end of March 2023, more than 2,100 Airbus aircraft were in service in China, accounting for more than 50% of the nation’s total fleet. 

Airbus would like to maintain that level of dominance and the US government is doing everything it can to help with its economic sanctions and national security fear-mongering. Boeing, which had (and perhaps still has) high hopes for the China market, is at its wit’s end trying to compete against Airbus.

Macron’s entourage also included executives of Electricite de France (EDF), water and waste management specialist Suez SA, shipping company CMA CGM, rolling stock and railway equipment manufacturer Alstom, cosmetics firm L’Oréal and many others.

EDF signed agreements to renew its partnership with the China General Nuclear Power Group in the design, construction and operation of nuclear power plants; to extend cooperation with China Energy Investment Corporation in offshore wind power; and to cooperate with China’s State Power Investment Corporation in the development of onshore wind power in Yunnan.

Suez signed an agreement with Wanhua Chemical Group and the China Railway Shanghai Engineering Bureau to design and build an industrial-use seawater desalination plant in Shandong.

CMA CGM signed an agreement with China Ocean Shipping Company (COSCO) and Shanghai International Port Group for the supply of bio-methanol and e-methanol fuels.

Alstom will provide electrical traction systems for the Chengdu Metro in cooperation with CRRC (formerly China National Railway Locomotive & Rolling Stock Industry Corp). Alstom has 11 joint ventures and eight wholly-owned subsidiaries in China.

L’Oreal entered into a three-year marketing agreement with Alibaba and reached an agreement with Shanghai Oriental Beauty Valley to establish an incubation platform for French cosmetics ventures in China.  

France and China also agreed to facilitate the issuance of visas for students, to restart scientific research projects interrupted by the Covid pandemic and to organize a year of cultural tourism to celebrate the 60^th anniversary of the establishment of diplomatic relations between France and China in 2024. The latter will include an exhibition of objects from Versailles at the Forbidden City.

Macron’s visit to China and meetings with Xi annoyed many American and British commentators and media outlets. The New York Times ran a headline saying “French Diplomacy Undercuts US Efforts to Rein China In.”

The Telegraph wrote “Macron has humiliated himself – and the EU. So much for Western unity.” Foreign Policy called Macron’s trip “a Fool’s Errand.”

Perhaps it was if the main purpose was to influence China’s policy toward Russia and bring peace to Ukraine. But that’s not clearly what was on Macron’s mind in Beijing.

Ursula von der Leyen, president of the European Commission, visited China at the same time as Macron but stayed for only one day.

An advocate of reducing the risk of economic dependence on China – although not of decoupling – she received a chilly welcome while Macron had tea with Xi and was mobbed by adoring Chinese students.

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