As elections loom, France ponders China's rise and impact on employment

PARIS (AP) - Europeans are grappling with a new version of the glass half-full or half-empty dilemma: Will the astounding economic rise of China suck jobs away from the old continent or create new ones? The moving of manufacturing jobs overseas is one of the hottest topics in France's presidential election campaign, even though some researchers suggest the problem is perhaps not as dire as many French workers fear or as the leading candidates sometimes make out.

Socialist contender Segolene Royal, who is visiting China this weekend to explore the issue, and her main rival on the French right, Nicolas Sarkozy, have both suggested that Europe must respond to the pressures of globalization - epitomized by competition from low-wage economies like China's - by better protecting its markets and jobs.

"Europe should open its markets only if the others do so at the same time," Sarkozy said Dec. 18.

Royal's take 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 - remaining obviously open to the world, but on an equal footing."

Some, like historian Emmanuel Todd, have gone further. Invited by Prime Minister Dominique de Villepin to speak at a conference on jobs last month, Todd suggested that European protectionism offered the sole defence against a "world economic system that is increasingly suffocating French society."

He singled out China's rise.

Royal, who unlike Sarkozy has not held top government posts and is travelling overseas to burnish her credentials as a potential head of state, said ahead of her departure for Beijing on Friday that China's development should not be feared. But she also noted that France has a US$19-billion trade deficit with China and that Germany exports four times more to China than France does.

"We must organize ourselves so that the development of China becomes an opportunity for job creation," Royal 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.

Quintessential British clothes maker Burberry faces likely scrutiny in parliament after it announced last year it is closing its factory in Wales, with the loss of 300 jobs, in March to switch that production to China. It still has two other factories in Britain.

In France, the government's statistics agency has estimated that an average of 13,500 industrial jobs were moved offshore each year between 1995 and 2001. A little under 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, media coverage in France.

Both Royal and Sarkozy have said they would make such companies pay: Royal by making them repay any state aid they received, Sarkozy by making them pay higher taxes than those firms that create jobs in France.

China expert Valerie Niquet said an oft-overlooked aspect of the debate in France is that cheap and massive imports from China of shoes, toys, clothes and such like have suppressed prices, keeping such products within reach of the poorer classes and buying "social peace."

But that coin has two sides. Because working classes have been among those hardest-hit by the offshoring of labour-intensive jobs, Chinese products are often all they can still afford to buy.

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

While the China issue will not be an election winner in France's election, Royal's four-day trip illustrates how the French political elite is according greater attention to a country whose economic and strategic importance it long overlooked, 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."

Royal is no old China hand - she previously visited in 1995 for a UN women's conference - but has clearly been well-briefed, not least on the importance that Chinese Communist leaders place on diplomatic protocol. She refused to say whether President Hu Jintao will be among those she will meet, saying it was for the Chinese to make such announcements.

Seeking to avoid any impression that she is playing favourites among Asia's main powers, she also noted that she previously visited India as minister for schools in the 1990s, and said she would meet with Japan's 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 Communist hosts. "I am not going as a giver of lessons," she said.

© The Canadian Press, 2007