Amid Outbreak, French Economy’s Dependency on China in the Spotlight

By Fayçal Benhassain | March 25, 2020 | 7:40pm EDT
A Sanofi pharmaceutical plant in southwestern France. (Photo by Iroz Gaizka/AFP via Getty Images)
A Sanofi pharmaceutical plant in southwestern France. (Photo by Iroz Gaizka/AFP via Getty Images)

Paris (CNSNews.com) – The coronavirus pandemic has revived a long running debate over the depth of Europe’s dependency on China, where many European businesses have relocated to cut costs and keep prices down for consumers.

Olivier Bogillot, president of Paris-based pharmaceutical company Sanofi, told the public channel France 24 that the COVID-19 outbreak has raised questions about the wisdom of the high level of outsourcing.

“We have to think in the future, at least in Europe, because we considered that locating most of our production elsewhere was a good solution, because we had a lot of pressure from the healthcare system to reduce the price. This crisis shows that it was probably not the right thing to do.”

“We have outsourced our production outside,” said Bogillot, who is also president of the French Federation of Health Industries. “The question arises whether today we will not have to reconsider this political choice.”

He also said that it would be necessary in the future for producers to be rewarded for keeping their operations in Europe.

The French Academy of Pharmacy has for more than a decade raised concerns about the fact that China and India together account for 60-80 percent of the active ingredients for drugs as vital as antibiotics, anticancer drugs and vaccines.

In early February, Republican lawmaker Eric Ciotti wrote in a column in the daily newspaper Le Parisien that the epidemic has “highlighted the economic subjugation of France and Europe to China” and that it was time for Europeans to awaken to the threat that that posed.

“It is high time for Europe to react, to rearm industrially, to rebuild production autonomy, to no longer be the helpless spectators of our enslavement,” said Ciotti.

Ciotti’s column was published at a time when confirmed COVID-19 cases in France were still in their single or early double digits. By Wednesday, France was reporting more than 22,000 cases, more than most other members of the E.U. but far behind the hardest hit trio – Italy (more than 69,000 cases), Spain (more than 39,000) and Germany (more than 31,000).

In a recent interview French philosopher Bertrand Vergely said that, “When China gets sick, the world gets sick with it.”

“To increase its profit margins, the European economy has relocated a lot to China where labor and manufacturing are cheaper than in Europe,” he said, noting that critics have been warning for years about the effect on entire sections of industry of the fact that so many products are manufactured abroad.

But, he said, “We didn’t want to hear.”

Vergely recalled that a government minister during former President François Hollande’s presidency had pushed for producing more in France and Europe, rather than in other countries, especially China, but that Arnaud Montebourg’s proposals had gone nowhere.

Meanwhile some mid-sized companies are taking over production of goods usually made in China as that country’s production levels were impacted by the outbreak.

Stil, a manufacturer of measuring instruments, was producing 30 percent of its thermometers in France before the coronavirus epidemic, while the rest were made in China. The company now aims to up that figure to 50 percent by the end of this year.

Stil president Gerard Lux told media outlets that the plant, with its headquarters near Paris, “has a production capacity of around 10 million thermometers a year, and we in France currently make nearly 300,000. So there is enormous room for improvement.”

Lux cautioned, however, that customers would have to decide whether they were willing to pay more.

“A French[-made] thermometer is more expensive than a Chinese one,” he said. “You take into account the salaries, property taxes, energy costs and so on.”

“We can never do without China,” Lux concluded, “but with the coronavirus the balance of power for French companies could change, and we might not stay totally dependent on them.”


 

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