- The Washington Times - Sunday, January 7, 2007

From combined dispatches

PARIS

Europeans are grappling with a new version of the glass half-full or half-empty question: Will the astounding, to many even frightening, economic rise of China take jobs away from the West or create new ones? The departure of manu- facturing jobs overseas is one of the hottest topics in France’s presidential election campaign, though some researchers suggest that the problem is not as dire as many French workers fear or as the leading candidates sometimes make it out to be.

Socialist contender Segolene Royal, on a three-day visit to China ending today to explore the issue, and her main rival, conservative Interior Minister Nicolas Sarkozy, have said Europe must better protect its markets and jobs from the pressures of globalization — epitomized by competition from low-wage economies such as China’s.

“Europe should open its markets only if the others do so at the same time,” Mr. Sarkozy said last month.

The view of Miss Royal is similar: “If we want to save our social model, then we must escape this naivete and use all means to protect our markets, our jobs, our workers, our industry — obviously remaining open to the world, but on an equal footing.”

Some, such as historian Emmanuel Todd, have gone further. Invited by Prime Minister Dominique de Villepin to speak at a conference on jobs last month, Mr. Todd suggested that European protectionism is the only possible defense against a “world economic system that is increasingly suffocating French society.” He singled out China’s rise.

Miss Royal, who unlike Mr. Sarkozy has not held powerful government posts and is visiting China to burnish her credentials as a potential head of state, said Thursday that China’s development should not be feared. But she also noted that France has a $19 billion trade deficit with China and that Germany exports four times as much to China as does France.

“We must organize ourselves so that the development of China becomes an opportunity for job creation,” she told reporters. “Some nations have managed it. One question is why France can’t.”

Concerns about jobs moving to China are not exclusive to France.

Famed British clothiers Burberry faces likely scrutiny in Parliament after it announced last year that it will shut its factory in Wales, with the loss of 300 jobs, in March and switch the plant’s production to China. It still has two other factories in Britain.

In France, the government’s statistics agency has estimated that about 13,500 industrial jobs were moved offshore each year from 1995 to 2001. A little less than half of those shifted to low-wage economies, with China absorbing the lion’s share.

Companies that announce plans to relocate offshore often get prominent, even critical, press coverage in France. Both Miss Royal and Mr. Sarkozy have said they would make such companies pay: Miss Royal by making them repay any state aid they had gotten, and Mr. Sarkozy by making them pay higher taxes than firms that create jobs in France.

China analyst Valerie Niquet said an oft-overlooked aspect of the debate in France is that cheap and voluminous imports from China of shoes, toys, clothes and other products have pushed down prices, keeping the items within reach of the poorer classes and buying “social peace.”

But that coin has two sides. Because members of the working class are among those hit hardest by the offshore departure of labor-intensive jobs, Chinese products often are all they can still afford to buy.

“All of this maintains a vicious cycle from which it is extremely difficult to escape,” said Ms. Niquet, director of the Asia center at the French Institute of International Relations.

Although the China issue will not be an election winner, Miss Royal’s trip illustrates that the French political elite is according greater attention to a country whose economic and strategic importance it had long overlooked, Ms. Niquet added.

Previously, China was “seen as a faraway object about which pretty much anything could be said because it did not have much consequence,” she said. “We’re in a period of transition.”

Miss Royal is no “old China hand” — she attended a 1995 U.N. women’s conference there — but she clearly has been well-briefed, not least on the importance that China’s communist leaders place on diplomatic protocol. She refused to specify whether President Hu Jintao would be among those she will meet, saying it is for the Chinese to make such announcements.

Seeking to avoid any impression that she is playing favorites among Asia’s main powers, she also noted that she had visited India as minister for schools in the 1990s and that she would meet with Japanese Prime Minister Shinzo Abe when he visits France this month.

Her China schedule suggested a trip heavier on photo opportunities than substance, with visits to the Great Wall, the Forbidden City and one of the sites Beijing will use for the 2008 Olympic Games.

She said she would discuss human rights — without browbeating her hosts.

“I am not going as a giver of lessons,” she said.

The visit is Miss Royal’s second overseas trip since card-carrying Socialists voted overwhelmingly in November to make her their candidate. Her first trip, to the Middle East, was not without controversy: Mr. Sarkozy took Miss Royal to task for meeting a Hezbollah lawmaker. She also faced criticism for not responding when the lawmaker compared Israel’s former occupation of Lebanon to that of the Nazis in France during World War II. Miss Royal said she did not hear that remark.

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