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.
China’s Internet censors have blocked searches on the name Carrefour, China Tech News reports.
The French superstore chain that is one of the largest foreign retailers operating in China with sales of €3 billion ($4.6 billion) last year, was the target of anti-French demonstrations earlier this month in retaliation for pro-Tibet protests when the Olympic Torch was in Paris on April 7. China Tech News speculates the reason is that “there are many webpages in China recently that talk about Carrefour that contain subtle information about Sino-France relations, Tibet independence and other ‘illegal’ content”.
The chain has its staff in its Beijing stores don Beijing Olympics caps and T-shirts in a gesture of goodwill, the China Daily reports. However, the games’ organising committee complained that the caps were for ‘commercial use’ and so infringed its copyright. The FT says that Carrefour is bracing for a further round of protests on May 1, though the authorities are likely to keep a firm lid on things getting out of hand.
After a weekend of intensifying anti-French protests in China in response to the pro-Tibet protests in the French capital on Apr. 7 when the Olympic torch was there, the Paris city council has bestowed the title of “honorary citizen” on the Dalai Lama. This may be taking Gallic insouciance a step too far.
Update: “The decision of the Paris city council to bestow ‘honorary citizen of Paris’ on Dalai will only be seen as another severe provocative act against 1.3 billion Chinese people… China urges France to take immediate and effective measures to eliminate the negative impact caused by its erroneous act… and stop interfering in China’s internal affairs, so as to safeguard China-France relations through concrete actions,” Chinese Foreign Ministry spokeswoman Jiang Yu said in a statement posted on the ministry’s web site on Tuesday.
The anti-French demonstrations that have been going on in China since the April 7th pro-Tibet demonstrations in Paris when the Olympic torch visited the French capital provide an bellwether test of Beijing’s ability to dial up and down nationalist sentiments.
While the protests intensified over the weekend, spreading to cities around the country with local branches of the Carrefour hypermarket chain the focus, official media have sought to distance themselves from the demonstrations and calls on Chinese blogs and online message boards for a boycott of French goods. Weeks of anti-Western rhetoric over the torch relay demonstrations around the world are being toned down, with Xinhua urging calm on Sunday after Saturday’s protests outside Carrefour stores in Beijing, Qingdao, Wuhan, Hefei, Kunming and Xian.
In the past anti-Japanese sentiment has been whipped up at will, though on the last occasion it went further than the authorities would have liked. France, though, is not the devil to most Chinese that Japan is. And it must concern the leadership that if such popular sentiment can be generated outside its ambit, the same thing might happen over domestic issues such as unemployment, inflation and official corruption.
As the Olympic torch continues on the Asian leg of its journey to Beijing, it has left behind TV images of chaos from Paris, London and San Francisco. This Bystander has noted China’s PR problem before, but what damage, if any, has that done to China’s international reputation? Media Tenor, a media research company that advises companies and governments on their reputation management, says in its current newsletter:
Media Tenor’s analysis of international TV news shows how the image of China has been severely damaged and that the Chinese underestimated the political connotations of hosting the summer Olympic Games; China’s aim to become one of the most respected players in the international arena has been quickly dashed as it has been unable to handle severe criticism by western broadcasters.
That stands in contrast with a study the firm did earlier in the year that showed that China’s efforts to be recognized as a responsible global player following its diplomatic efforts in Darfur and its work to intensify and improve trade and political links with Taiwan and India, had been reversing criticism of it for oppression and human rights violations.
That at least is how it all seems from looking at the Western press and broadcasters. Witness the protests against French supermarket Carrefour in several cities across China on Saturday, in reaction to pro-Tibet demonstrations when the torch was in Paris, for the tenor inside the country.
Areva, the French nuclear power plant builder, has at least got is contract to construct two third-generation pressurized water reactors in Guangdong. Signing the $11.9 billion contract had been expected in July or August, but it has had to wait for the visit to China of new French president Nicholas Sarkozy.
It has been a good trip for French business. Airbus picked up a $17 billion order for 160 planes. Telecoms-equipment maker Alcatel-Lucent, engineering group Alstom and water and waste management company Suez also sealed deals in what Sarkozy called an “unprecedented” haul. (Details here, via Bloomberg.)
None of that stopped the French president calling on his hosts to revalue the yuan, address human rights issues in China and to take a more robust diplomatic role over Iran, Burma and the Sudan. But all he got in return on those issues was an invitation to attend next summer’s Olympic games in Beijing, a vague agreement on climate change — and a lot of euros for the 40 French business leaders accompanying him.