Sarkozy in China: a wonderful haul

Nicolas Sarkozy has visited China, where he has meet Hu Jintao’s Administration. In fact French government is willing to build strong partnership with China to enhance economy growth, spur exports and negotiate some changes in monetary policy. It appears for the moment that this meeting has generated many agreements. Thus Sarkozy’s trip in China seems to be a huge success.

· New contracts for French companies

o 20 billion of contracts
French companies have strengthened their position in China, where they have managed to create many fruitful partnerships and agreements. In fact French companies have already signed 20 billion of contracts. This wonderful haul is much higher than expected. Thus Sarkozy intends to enhance French economy by spurring exports to China.

o Many companies involved
Most of the sectors have benefited from this wave of agreements. Although Areva and EADS are the biggest winner of those transactions, many other companies also managed to find a deal.

EADS managed to sell 160 planes to China, which will generate 12 billion of Euros. Although this command is a huge success for EADS, it might be a disappointment as it is does not include any A380. However Mr Gallois, the CEO of EADS, is quite delighted regarding those new commands.

Areva also managed to generate 8 billion of euros through negotiation of new contracts with China. Areva has been negotiating for those contracts for many years in order to be the company which will supply China with nuclear energy. There was a big competition with American companies. Finally they managed to convince Hu administration that French nuclear knowledge was the best in the world. This is a huge success for Sarkozy, as China will spend substantial amounts of money in this business in the following years. Furthermore EDF, and Suez have also been able to create some partnerships with China in Energy sector.
Moreover in technology sector, Alcatel-Lucent has signed some contracts with China. Thus this company will earn 750 million of Euros thanks to Sarkozy’s trip.
In Pharmaceutical sector, the French champion Sanofi-Aventis has also benefited from this negotiation wave in China. In fact it will create a new factory in China in order to be stronger in vaccines market.
Finally Alstom, Europcar and also Natixis have developed their position within Chinese market.

· Negotiation regarding monetary policy

In the same time, Sarkozy has tried to negotiate some changes regarding the monetary policy. In fact most of currencies specialists claim the Yuan is undervalued. Thus world trade is unfair and China is benefiting from an undervalued Yuan to sell its products at very cheap prices.
The goal of French government is to convince China to increase the value of its currency, as Sarkozy said ``we need to reach harmonious and fair exchange rates''. Consequently these negotiations should accelerate the Yuan appreciation against the Euro.

· Big change after a long period of tension due to trade

The visit of Sarkozy in China is the symbol of a big change in geopolitical situation. In fact, during the previous years there was a big tense between China and Europe due to trade policy. Thus current negotiations may create a new period of strong cooperation between France and China. For instance they emphasized that they have the same point of view regarding the cooperation in North Korea nuclear dispute, the restoration of peace in the Darfur region, the nuclear problem in Iran, the position with Taiwan,etc.
Furthermore French government agreed to share technologies with China in order to improve climate and energy issues.

· A good opportunity for Sarkozy to improve its image

Finally those successful negotiations might help Sarkozy to improve its image in France, where its popularity is going down sharply. Thus he might convince French people that he is still the one they need to improve economical issues.