France expects exports to the Chinese mainland to grow by at least 20 per cent this year from 2005, mainly boosted by China's booming economy and the strenuous efforts made by both nations to enhance bilateral ties.

"We expect exports to the Chinese mainland to reach more than US$11 billion this year, compared with last year's US$9 billion, according to statistics from the Chinese side," Hubert Testard, chief of the economic mission at the French embassy in China, told China Daily in an interview.

Trade volume between China and France climbed 17.5 per cent to hit US$20.65 billion last year, according to statistics from the Ministry of Commerce (MOFCOM).

This year will also witness the first increase in five years of France's market share in China's imports, which is expected to reach 1.45 per cent, compared with the roughly 1.35 per cent of the past three years, said Testard.

"That's because the market share from many other western countries to China are on the decline," explained Testard.

Currently, France is the second-largest exporter to China among the European Union nations, after Germany and followed by Italy and the United Kingdom, according to statistics from the French embassy.

"Although the current trade level (with China) is not quite satisfactory, we are satisfied with the trend, which we think is very positive," Testard said.

In the years to come, areas that have big potential for trade and investment growth between China and France include aircraft, consumer goods, infrastructure, energy, environment, telecommunications and the heavy industry.

According to MOFCOM statistics, French companies channelled an investment of US$615 million in 2005, ranking fourth among the major EU countries doing business in China.

Paris-based Airbus announced recently that it would soon reveal further details about its A320 final assembly line in Tianjin in North China. The Tianjin plant, which is reported to be 51 per cent controlled by Airbus, is the French firm's first aircraft assembly line outside Europe and highlights its great commitment to the tremendous Chinese market.

The plant's first jet was expected to come off the assembly line in 2008.

For consumer goods, Testard said as the average income of Chinese residents increases, there will be a growing number of middle-class Chinese people preferring to buy famous foreign brands, ranging from cosmetics, fashion to luxury goods and the like.

"There will be a significant growth (in French exports of consumer goods to China), and it is a long-term trend," said Testard.

In addition, as the world's fastest-growing major economy fuels the rapid development of China's energy and infrastructure projects, Testard also sees great potential in further Sino-French co-operation in these areas.

Alstom, the world's leading power and transport company, will increase its presence in China's power industry by expanding its manufacturing capacity, Philippe Joubert, president of Alstom Power Generation, said in June.

The company has officially opened Alstom Beizhong Power Co Ltd, a joint venture with Beijing Heavy Electric Machinery Works. Located in Beijing, the joint venture's investment in manufacturing facilities and equipment alone amounts to approximately 800 million yuan (US$100 million), according to Alstom.

French power giant EDF, a leading foreign investor in power generation in China, now operates coal-fired power plants with an installed capacity of 3,720 megawatts.

Driven by China's surging energy demand, EDF is actively looking at more business opportunities in the booming Chinese electricity market.

When Premier Wen Jiabao made his official visit to France last December, he predicted Sino-French trade was likely to double to US$40 billion by 2010.

Responding to the forecast, Testard said it is possible for bilateral trade growth to remain an annual rate of about 20 per cent within the coming years, and the 2010 target set by Wen is "realistic."

"We not only sell products and sign contracts in China, we are aiming for a long-term strategic partnership with China," Testard said."By combining the Chinese and French strengths, we can better provide service to the Chinese market, and serve other countries."

(China Daily 10/25/2006 page18)