Renault Affair Is New Face Of National Rivalry

Is the Chinese auto industry behind the alleged theft of industrial secrets from the French automaker, Renault? Bernard Carayon, the French lawmaker from President Nicolas Sarkozy’s conservative party who heads parliament’s working group on economic intelligence, thinks there is reason to believe so, citing “proven, diverse and reliable” sources. Sarkozy, himself, has reportedly put the French intelligence services on the case. Three Renault executives, reportedly including one of its management committee, are accused to selling proprietary technical information about the engines and batteries for the electric cars on which the carmaker has bet its future to the tune of a $5 billion investment with its partner, Japan’s Nissan. The three executives have been suspended and face legal action, the company says. (Update: Renault said at the weekend that it has lost no critical technical or strategic information, only design and cost details. Via Deutsche Welle.)

Clean technologies in general and electric cars in particular are seen as a market in which Chinese companies can establish leadership. In 2007, a Chinese student on work placement with Valeo, a French clean-technology industrial group, was jailed by a French court for obtaining confidential documents from the company. Valeo now builds the power trains for electric cars it is developing with Beijing Automotive.

China is widely suspected in the West of indulging in widespread state-backed industrial espionage, the dark side of Western multinationals’ private grumbling that Chinese companies are draining them of technology in return for access to the Chinese market. China’s industrial development may be moving long-term from imitation to innovation, but the old habits are dying hard.

What makes that more difficult for multinationals is the way nation states’ expression of hard power is becoming more dependent on economic strength. Rivalry between nations is increasingly being framed in terms of economic competition, trade and investment jockeying, cyberwarfare and corporate espionage. This is happening when the leading, most technologically laden multinationals are becoming more global and less rooted in the nations from which they were born.

There is also a domestic French political dimension to the Renault case. If China’s involvement is established, it is likely to set back Sino-French relations. They hit a low point two years ago when Sarkozy criticized Beijing’s policy on Tibet before President Hu Jintao’s visit to Paris bearing a raft of Chinese buying orders late last year restored the equilibrium. Another downturn would make for a rough year for Sarkozy’ presidency of the G-20. He needs needs Beijing’s cooperation on issues from global governance to climate change for the successful high-energy presidency that is seen as a necessary precursor for his reelection as France’s president in 2012.

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