7th Choose France Summit: France on the right track

The 7th edition of the Choose France Summit, which took place at the Château de Versailles on May 13, 2024, set a new record with the announcement of 56 investment projects totaling 15 billion euros and the creation of 10,000 jobs. The event underscored the crucial role of investment in strategic sectors such as healthcare, the environment and new technologies. So, is France heading in the right direction?

On Monday May 13, 2024, the prestigious Château de Versailles hosted the 7th edition of the Choose France Summit. Organized under the theme “France, land of champions”, the event brought together nearly 200 foreign business leaders of 40 different nationalities, marking a record with the announcement of 56 projects representing a total of €15 billion in investments and the creation of 10,000 jobs.

These investments are in a number of key sectors, including healthcare, the environment and new technologies. For the fifth year running, France is thus maintaining its position as Europe’s most attractive country thanks to a proactive economic policy.

Since its launch in January 2018 by President Emmanuel Macron, the Choose France Summit has become an annual fixture on the agenda of international industrialists and investors. Since its inception, it has led to the announcement of 178 projects representing a total of €31.2 billion in investment. However, monitoring these projects remains a complex task, with some investments spanning several years.

Under the banner of major events

Choose France provides an opportunity for privileged exchanges between members of the government, foreign investors and French companies, underlining the importance of international investment in supporting growth, innovation and employment in France.

The 7th edition of the Summit echoed the major events of 2024, notably the Paris Olympic and Paralympic Games, and highlighted French pride as embodied by the “Make it Iconic” campaign. The theme “France, land of champions” was illustrated by the presentation of the torches and medals of the Paris 2024 Games, symbolizing French know-how.

In addition, India was this year’s guest of honor, and a round table brought together French and Indian companies, strengthening economic ties between the two countries.

Record investments

Microsoft will invest 4 billion euros in data centers dedicated to the cloud and artificial intelligence to support French growth in this sector. Pfizer plans to invest more than 500 million euros over the next five years in public-private partnerships focused on innovation, while Amazon will invest more than 1.2 billion euros in cloud, artificial intelligence and logistics, creating more than 3,000 direct permanent jobs. AstraZeneca, meanwhile, will invest 365 million euros to expand its Dunkirk site, creating 100 additional jobs.

Among other major investments, the European consortium FertigHy will invest 1.3 billion euros in natural gas-free nitrogen fertilizers. KDDI, a Japanese company, is promising 1 billion euros in artificial intelligence. Finally, projects involving decarbonization, batteries, quantum computing, vertical take-off electric aircraft, nickel refining, rare earths, Thermomix and finance are also on the agenda.

These projects have been made possible not only by investors, but also by the €54 billion “France 2030” program and the research tax credit, which costs French taxpayers more than €6 billion a year (rising to around €40 billion by 2030). However, this funding falls far short of the 60 billion euros required annually for France’s ecological transition, totaling 300 billion euros over five years. Well beyond the 54 billion euros allocated by France 2030.

The importance of the jobs generated

According to a compilation by L’Usine Nouvelle, the majority of investments announced as part of “Choose France” concern extensions to existing sites, with only 27 out of 122 projects dedicated exclusively to new locations. Very few projects were abandoned, with only two confirmed by the Élysée Palace.

However, a number of projects were already up and running, notably in the digital sector. Google inaugurated an artificial intelligence research center in Paris in February, while Snapchat has had an augmented reality studio in Station F since 2021.

According to economist Lucas Chancel speaking in a recent article in Le Monde, it’s the direct or indirect jobs generated by these projects that matter most, although assessing the number of jobs created by the 122 “Choose France” projects since 2018 is difficult, if not impossible. EY’s latest attractiveness barometer shows that France, while leading Europe for the fifth year running, remains ahead of the UK and Spain in terms of jobs created by foreign investment.

Smokescreen?

Figures published by EY for 2023 show that France attracted 1,194 foreign investments, with the potential to create 40,000 jobs over the coming years. In 2023, 201 factories were created in France, three times more than in the UK and six times more than in Germany. However, despite these encouraging figures, industry in France only accounts for 16.8% of GDP, comparable to the UK, but well below that of Germany and Italy.

To return to a higher level of industrialization and reduce the trade deficit will require long-term political determination, probably until 2027. The upcoming European elections will be a crucial test for France’s political forces, as the country seeks to reverse its industrial and agricultural trajectory.

The industrial investments of Choose France 2024 won’t be enough to solve these challenges in the short term, but effectively mobilizing public and private funding in industrial, agricultural and environmental engineering projects could prove crucial for economic growth, employment and the purchasing power of the French people.

The China-Europe divorce

China maintains its position as the leading Asian investor and job creator in France for the third year running, with direct investment exceeding US$4.9 billion. Currently, Chinese investors are involved in over 900 French companies, providing work for more than 50,000 people in France.

One example is Fosun International, owner of Lanvin, whose CEO Guo Guangchang took part in the Choose France Summit. On this occasion, he met with Olivia Grégoire, Minister Delegate for Business, Tourism and Consumer Affairs, Laurent Saint-Martin, Director General of Business France and other leading public decision-makers. In particular, he exchanged views with the heads of major companies including BNP, AXA and Groupe BPCE.

“Since our debut on the French market in 2010, Fosun has become a bridge for cultural, tourism and commercial exchanges between France and China, and is currently the largest private Chinese company investing in France,” said Guo Guangchang. “The group’s annual sales in France exceed 2 billion euros, and we employ more than 10,000 people in the country, over 95% of whom are recruited locally.”

For their part, however, European companies are increasingly moving away from the Middle Kingdom. According to a report by the European Chamber of Commerce in China, the outlook for European investment in China is the weakest in 20 years. More than a quarter of European companies surveyed are pessimistic about their ability to grow in China. Only 13% consider the Middle Kingdom to be their preferred investment destination.

For Grégory Louvel, business lawyer in Beijing, European companies are no longer in tune with China. “The real problem is not China, but Europeans. That is, to what extent Europeans are able to sell products to the Chinese,” he explains. “Luxury goods are a source of tension because they are a weapon of Chinese political retaliation against the Europeans, and there’s a kind of permanent political game going on. As for consumer goods in general, the Chinese have moved upmarket. So what do we have to offer the Chinese? We have to question ourselves.”

Geopolitical factors also contribute to this disaffection. China’s support for Russia, tensions with Taiwan and US sanctions against Beijing have made China too dangerous and risky a market for European investors. Multinationals are now focusing on Southeast Asia, particularly Vietnam, Indonesia and Singapore.