Macron, Xi Pledge to Uphold Free Trade During China Visit

(Bloomberg) --

China and France vowed to uphold multilateralism and free trade and build an open global economy, as President Xi Jinping nears a phase one trade deal with the U.S.

Xi's comments came during a three-day visit to China by President Emmanuel Macron. “Together, we sent a strong signal to the world to firmly uphold multilateralism and free trade and build an open world economy. Your speech also aroused strong repercussions and resonance in China,” Xi said as the two leaders met Wednesday in Beijing. Macron is slated to speak with Chinese Premier Li Keqiang and attend a state banquet hosted by Xi later in the day.

“I am willing to work with you to face toward the world, the future, to cater to our people, to promote the comprehensive strategic partnership between China and France to a higher level, and continue to be at the forefront of the relationship between major powers,” he said.

U.S. House Speaker Nancy Pelosi told Bloomberg Friday that Democrats would be tougher on China than Trump by aligning with the EU to bring additional pressure on the world's second-largest economy. She said Trump was correct to identify China's aggressive trade policy as a threat to the U.S., but she faulted his approach as ineffective and said he's further hobbled the U.S. position by engaging in a trade conflict with the EU at the same time.

Macron said Wednesday he'd told Xi he hoped U.S.-China trade tensions would calm down. He also stressed that France welcomes foreign investment and would not target individual countries.

“This European sovereignty we build it for ourselves, something that China has always done for itself too,” Macron said. “This is the goal of the strategic agenda for investments and critical infrastructures. This European sovereignty is not being build against others, foreign investments are welcomed in Europe, without discrimination, in full respect with our interests in sovereignty and security.”

Strengthening Cooperation

Macron said earlier this week that China and the European Union will sign an accord to protect products that have a specific geographical origin -- such as Champagne or Manchego cheese -- in a bid to fight counterfeits. He said the accord would be signed in Beijing on Wednesday. The EU is China's largest trade partner, and the Chinese market is the second biggest after the U.S. for exports from the bloc.

“I know how committed you are to the European Union and we must build a stable partnership on the big questions of the world in a world that is more and more destabilized,“ Macron told Xi. “The capacity we will have to reform the WTO, to avoid trade tensions is absolutely defining.“

Earlier this year, Europe claimed a diplomatic victory in the push for Beijing to pursue fairer economic policies, saying a laboriously drafted joint statement signaled important Chinese concessions over curbing subsidies to domestic industries and facilitating market access for foreign companies. The EU bloc has sought to enlist Beijing's help on numerous fronts as U.S. President Donald Trump has turned his back on international organizations and agreements that had counted on staunch U.S. support.

Europe Claims Progress in Prodding China to Open Its Market

During Macron's visit, China and France also agreed to strengthen cooperation on climate change and preserve the Paris accord.

France expected about forty contracts to be signed during Macron's state visit in aeronautics, finance, energy, tourism, health and agriculture, an official said last week before the trip. Talks for a potential contract for nuclear engineering group Orano in China were accelerating, the official said.

Xi told reporters the two sides would promote major nuclear and aviation projects, without elaborating, and said they had agreed to promote market openness, investment and IP exchange. They will enhance cooperation on issues ranging from cultural and study exchanges to stopping the smuggling of antiquities, he said.

Aircraft engine maker Safran is in advanced talks over a major order in the Asian powerhouse that could be signed during Macron's visit, Bloomberg reported.

Societe Generale SA is also considering a fully-owned brokerage in China, joining a rush by the world's biggest banks as the country speeds up the liberalization of ownership restrictions in the financial sector. Macron's previous plans for China included investing 1 billion yuan ($142 million) to obtain a 51%-owned local brokerage, but SocGen is becoming more ambitious as it seeks growth abroad and retrenches in a sluggish European market.

--With assistance from Helene Fouquet and Ayaka Maki.

To contact Bloomberg News staff for this story: Peter Martin in Beijing at pmartin138@bloomberg.net;Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Karen Leigh, Sharon Chen

©2019 Bloomberg L.P.

With assistance from Bloomberg