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article imageOp-Ed: The price to pay for doing business with China

By Michael Cosgrove     Nov 6, 2010 in Business
Multi-billion dollar contracts, a deal on G20 and France’s Nicolas Sarkozy gets to remind China on human rights. The official version of Chinese leader Hu Jintao’s state visit to France looks impressive, but it hides an uncomfortable reality.
The second day of Chinese leader Hu Jintao’s visit to France was spent in Nice on the Mediterranean coast with President Nicolas Sarkozy. They went there because Nice is France’s second most popular city for Chinese tourists after Paris and the Chinese premier used the occasion to press the flesh of a few of them before getting down to business.
The main item on their agenda was the G20 summit on November 12 which will be presided over by Sarkozy, who quite naturally wants it to succeed as it will signal the beginning of his one-year presidency of the G20.
During the post-talks press conference he announced that “there is real convergence between China and France on the G20 objectives to be reached as well as on the route to follow, the modalities and the understanding which will be essential for {Sarkozy’s proposals to reform the world monetary system.}”
Concerning human rights in China, he affirmed that “President Hu Jintao is someone with whom discussion is possible. There are a lot of differences between the Chinese and the French but we talked about all subjects. There are no taboos, notably on the question of human rights.”
And that wasn’t all. The day before had seen the official signing of major contracts between French companies and China which included deals on 102 Airbus airliners, 20,000 tons of uranium, a nuclear waste treatment plant, two reactors and a host of other deals for products such as methanol-based plastics technology and telephone networks. The total value of these contracts is well in excess of $20 billion, which is a substantial figure for a country the size of France.
But if we look at these apparent successes from another angle, it becomes obvious that they are anything but.
France saw the potential benefits of recognizing the People’s Republic of China earlier than any other western country and Charles de Gaulle established diplomatic relations with Peking in 1964 in a bid to see France become a power-broker between Russia and America via its newly-created special relationship with the Chinese. This move was violently criticized by the United States and Britain, who saw it as being an attempt to counter their policies in Asia – which of course it was - and it took 8 more years before President Nixon followed suit.
France saw itself from 1964 on as a special friend of China and Paris bent over backwards to appease Peking. That cozy relationship lasted until 2008 precisely, when Nicolas Sarkozy suddenly decided in his typically flamboyant manner that he was going to single-handedly put China back in its place on human rights. His intentions were laudable and courageous, but they were directly responsible for what proved to be a disastrous period in Franco-Chinese relations.
His open support for the Dalai Lama during the Tibet crisis of 2008, which included personal meetings with him that almost no other western leader would have even contemplated as well as heavy criticism of Chinese human rights policies, infuriated Peking to the point where Hu Jintao made it clear that France was no longer to be counted upon as the friend it had once been. Sarkozy, far from being intimidated, responded that he was considering a boycott of the 2008 Peking Olympic Games in retaliation for China’s refusal to improve its human rights record.
Hu Jintao is the current president of the People s Republic of China. - Photo by Helene C. Stikkel  ...
Hu Jintao is the current president of the People's Republic of China. - Photo by Helene C. Stikkel, Courtesy Wikipedia
The Chinese riposte was swift and devastating. An anti-Sarkozy campaign whipped up anti-French sentiment across China, diplomatic relations became extremely strained and, most importantly, the steady flow of orders which had been given regularly to french companies by the mountains of investment cash just begging to be spent by booming China dried up immediately. France suddenly found itself bundled unceremoniously out of the loop and two years of unofficial boycotts of French exporters began, just as the world financial crisis was beginning to devastate the economies of western countries, including France.
The boycott couldn’t have come at a worse moment and the Chinese prime minister at the time – Wen Jiabao – rubbed salt into the wounds by ostentatiously refusing to visit Paris during a European tour arranged to conclude major business deals. It was the deep-freeze treatment.
As time went by, Sarkozy realized just how much damage was being done to French businesses by the boycott, and he began to tone down his rhetoric despite domestic criticism that he was selling out on his principled stand, criticism which continues to this day. His references to the Dalai Lama became much less frequent and he was forced to abandon him. A stark example of that was his “unfortunate” inability to see him in Paris during a European visit under the pretext that he was “extremely busy,” and no French government official was permitted to meet him either.
Sarkozy’s gradual climbdown on human rights was finally deemed sufficiently deserving of reward by Peking, and he was invited to visit China in spring of this year, where he gratefully accepted the few business crumbs offered to him by Peking in the form of a few very minor contracts.
More good news for Peking came in the form of France’s conspicuously muted reaction to the Nobel Prize committee’s courageous decision to attribute the 2010 Peace Prize to jailed Chinese dissident Liu Xiaobo.
This brings us back up to today, and the newer, humbler, more understanding of China version of Nicolas Sarkozy. His resistance has been broken. But for all that he is quite right to have decided that he is no longer going to take on the Chinese alone. After all, other European countries are putting human rights issues aside in order to do business with China, America is doing the same, and it would be suicidal in economic terms to continue to deprive France of a major and much-needed source of export revenue.
That is why his hot air declarations in Nice yesterday praising China’s willingness to discuss human rights carefully avoided mentioning Chinese Foreign minister Fu Ying’s affirmation the day before in Paris that Liu Xiaobo “is not a subject that should be brought up between China and France.” It is also why the talk of an informal G20 agreement with China is totally baseless, as China will do as it pleases during November’s meeting, make no mistake, and that includes sabotaging Sarkozy’s plan because it implies that the Chinese must re-evaluate the yuan. Finally, it explains why all the shiny new contracts have been secured in part by guaranteeing technology transfers which will weaken French industrial competitiveness in the medium term and strengthen that of China, particularly in the areas of commercial airliner and nuclear reactor construction.
The bottom line is that the public declarations in Nice are all window-dressing and that France has learned the hard way that if you play with the dragon’s fire, you get burnt.
France has finally had to admit defeat, thus joining the rest of the western world in its neglect of human rights issues in China in exchange for increased trade. That is the price of doing business with China.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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