November 16, 2023. Shanghai – Following a year of reinvigorated bilateral Sino-French relations in 2023, what opportunities do French companies have to better adapt to an era of digital transformation in the Chinese consumer market? Moreover, how can Chinese companies fully understand and adapt to the French market to expand their global footprint? 

With France having emerged as China’s third largest trading partner in the EU and China as France’s number one trading partner in Asia, the CEIBS Paris Forum was held today at dual venues in Paris and Shanghai to answer these questions and explore the various opportunities and challenges of Sino-French cooperation. Co-organised by CEIBS and CCI Paris Île-de-France, the event brought together a host of representatives from the governments, business communities, and academic institutions of China and France to engage in open dialogue and in-depth discussions. 

In her welcome address, CEIBS President Wang Hong noted that despite its ups and downs, China and France enjoy a time-honoured and vibrant friendship as two major civilisations spanning East and West, and that high-level visits between the two countries earlier this year had led to a resumption of bilateral cooperation in numerous fields.

She further pointed out that the Chinese government has recently issued 24 policy measures to attract foreign investment, has relaxed regulations on cross-border data transmission, and has removed restrictions on foreign access to manufacturing. These initiatives, she said, have created vast opportunities for European and French companies to invest in China. She also noted that a recent business survey indicated that around 80% of Chinese companies have mulled over plans to increase investment in Europe.

“At present, global science and technology centres are mostly based in Europe, North America, and the Asia Pacific. As the international innovation landscape is reshaped, multinational cooperation and alliances will be essential in promoting innovation globally,” she added.

Looking into the future, President Wang pointed out that the two countries have huge mutual development potential, given that they are complementary in areas such as digital economy, green energy consumption, and scientific and technological innovation. 

In her own welcome address, President of CCI Paris and Vice-President of CCI Paris Île-de-France Soumia Malinbaum pointed out that the vast Chinese market and recent digital innovations have opened new development potential for French companies in the consumer goods and services sectors.

“During the past few months, we’ve seen an increase in high-level engagement between our two countries, demonstrating that both sides intend to build on our renewed relationship with a focus on creating a level playing field for enterprises, strengthening cooperation in the services industry, and facilitating economic and trade exchanges on the basis of mutual benefit,” she said.

However, she continued, difficulties in obtaining visas and increased competition from local brands, combined with China’s unique digital ecosystem, present major obstacles for small and medium-sized French enterprises and startups.

It is therefore important for French companies to obtain information and grasp every opportunity that may arise in the Chinese market, rather than walking away from it, she added.

In an opening address, Chinese Ambassador to France Lu Shaye highlighted that 2024 will mark both the 60th anniversary of the establishment of bilateral Sino-French diplomatic relations and the China-France Year of Culture and Tourism. Starting from this historical inflection point, he continued, three factors are essential to consolidating Sino-French relations.

“First, a firm belief. Sino-French relations have a bearing on the well-being of the peoples of our two countries and on global stability and development. Therefore, we should develop bilateral relations from a strategic and long-term perspective,” Mr. Lu explained.

“Second, the 60-year history of Sino-French diplomatic relations shows that a high degree of mutual political trust is a prerequisite for the stable and healthy development of our bilateral relationship. To enhance this trust, both sides should seek common ground while putting aside our differences. We’re partners, not rivals. We should pursue cooperation rather than de-risking, which will only lead to mutual misunderstanding and suspicion.”

“Third, our two countries should remain confident in our development and bilateral cooperation. France is an important economy in global governance and China's crucial partner in foreign economic cooperation. China and France have much to achieve together in the areas of high-end manufacturing, modern services, digital economy, and green energy,” he added.

In a video message, French Ambassador to China Bertrand Lortholary said that Sino-French relations have been reinvigorated and demonstrated positive momentum since French President Emmanuel Macron’s visit to China in April.

He noted that there are more French enterprises present in China than from any other European country, and that French companies are committed to the Chinese market, evidenced by their attendance at the recent China International Import Expo (CIIE) in Shanghai.

“The great potential of the Chinese market offers vast opportunities for bilateral economic relations,” Mr. Lortholary added.

That said, writing a new chapter amid a turbulent global climate will require the visibility of French participants in the Chinese economy to be improved and for challenges to be addressed on a basis of mutual trust and equality, he continued, emphasising that “we should ensure that European companies in China enjoy the same level of openness and market access that Chinese companies enjoy in Europe.”

“On the global level, both France and China bear significant responsibility and possess great potential for cooperation in addressing the issues of climate change, global healthcare, world security, and peace,” he added.

Mr. Lortholary also called for the two countries to leverage the valuable opportunities presented by 2024 to facilitate closer Sino-French cooperation in the areas of culture, sports, education, and technology.

Following this, Chairman of L'Oreal Group Jean-Paul Agon then outlined the changes and trends that have shaped the Chinese consumer market over the years and noted that China’s advanced digital technologies and rising middle-class population have facilitated L’Oreal’s development in the country.

"When L'Oreal entered the Chinese market in 1997, we had only a dozen China employees and a very small office. But, at that time, I was convinced that China was crucial to L'Oreal, and that it wouldn't be long before the Chinese branch would become the largest in the group," Agon said, adding that L'Oreal China is now thriving with more than 15,000 partners throughout the country.

Having witnessed nearly 30 years of development in China, he then offered two pieces of advice for foreign businesses hoping to invest in the country. “First, have confidence in a market that offers such vast opportunities; second, remember that the Chinese market is one of the most competitive and open markets in the world,” he explained.

Former General Director of the Department of Fiscal and Financial Affairs of the National Development and Reform Commission Xu Lin then delivered a speech entitled Opportunities Offered by China's Economic Transformation, in which he suggested that China would in the coming years become a service-oriented, intelligent, green and low-carbon economy.

This transformation into a service-oriented economy, Mr. Xu said, is the inevitable result of a shift away from investment-driven growth to consumption-driven growth, and the development of the service industry, with its many categories and highly specialised division of labour, requires a free environment and less government regulation to flourish.

Furthermore, the trend toward the integration of digital intelligence technology into all areas of economic and social development is inevitable, he added, while China’s "dual carbon" environmental targets are leading to a new pattern of market resource allocation. Mr. Xu concluded by asserting that these transformations will be the new driving forces of sustained economic growth in the future.

The forum also featured an engaging roundtable discussion led by CEIBS President (European) and Professor of Marketing Dominique Turpin on the theme of Upgrading Consumer Marketing in the Digital Age, featuring as panellists Chairman of Haier Smart Home Li Huagang, Dassault Systèmes Vice President of Home and Lifestyle Benoit Dauchin, President of Cognac Cyril Camus, and CEIBS Professor of Strategy Chen Weiru. All panellists agreed that the development of the digital economy has contributed to consumption upgrade worldwide, that digitalisation will be a defining characteristic of the future of the global economy, and that China stands at the forefront of these trends.

In his closing remarks, Former Prime Minister of France and CEIBS Distinguished Professor Dominique De Villepin affirmed that the world is currently going through an era of great change, particularly in terms of the global economy, technology, and the environment. Dialogue and cooperation at all levels are essential in addressing the resulting challenges and protecting globalisation, he added, which means we need to seek common interests and values beyond the national level.

These new trends are also shaping consumer behaviour, he said, noting that “Consumers are more demanding of technological innovation and product quality, and desire higher quality and environmentally and socially responsible products with greater transparency in the production process to respond to the climate crisis.” 

In wrapping up the event, CEIBS Vice President, Dean and Professor of General Management and Leadership Frank Bournois thanked all participants for a fruitful and educational exchange, noting that “while the challenges are real, we also see many opportunities; and while challenges are short-term, opportunities are long-term.”

CEIBS is the only business school in China to be jointly established by the Chinese government and European Union. The school offers MBA, Finance MBA, EMBA, Global EMBA, Hospitality EMBA, DBA (Switzerland) and Executive Education programmes. CEIBS has placed in the top tier of the Financial Times’ ranking of global MBA programmes for seven consecutive years and has been ranked 2nd on its global EMBA list for four consecutive years.

Since its launch in 2012, the annual CEIBS Europe Forum Series has hosted nearly 30 overseas forums in eight countries, featuring more than 200 keynote speakers and attracting more than 8,000 participants from government, industry, and academia. With a focus on the most pressing issues of the day, the forums serve to maintain open dialogue between China and the world and to promote cooperation in tackling the challenges that affect us all.