World

France, China sign $30 billion in nuclear, airliner deals

President of the People Republic of China Hu Jintao (left) welcomes his French counterpart Nicolas Sarkozy at the Diaoyutai host residence in Beijing, China.
President of the People Republic of China Hu Jintao (left) welcomes his French counterpart Nicolas Sarkozy at the Diaoyutai host residence in Beijing, China. Pool photo by Eric Feferberg/Abaca Press

BEIJING — French President Nicolas Sarkozy, remaining largely silent on sensitive human-rights topics, won deals from China on Monday for two nuclear reactors and 160 Airbus jetliners together worth some $30 billion, an amount he called unprecedented.

"The total amount of these contracts has never been matched before," Sarkozy told Chinese President Hu Jintao in the Great Hall of the People.

The sales appeared to be a reward to France for respecting Beijing's sensitivities on such matters as Tibet. Sarkozy, unlike his German and American counterparts, hasn't received the Dalai Lama, the Tibetan spiritual leader, whom China condemns as a separatist.

It also would boost Airbus' order book significantly, placing it well ahead of U.S. rival Boeing.

The Chinese long have used commercial-airplane orders as a political tool, giving orders to Airbus when their relations with the U.S. sour or buying Boeing planes when their relationship with Europe is rocky. They often time their orders to coincide with visits by U.S. presidents or heads of European countries.

Boeing spokesman Jim Proulx in Seattle had no direct comment on the latest Airbus order, but said Boeing continued to work with the Chinese government on future orders.

Even as the deals displayed China's growing economic brawn, a spat involving Europe's visiting trade chief underscored the complexity of Beijing's surging commercial relations with the world.

In unusually pointed remarks, European Union Trade Commissioner Peter Mandelson said at a forum that China must do more to protect consumers from tainted products and act quickly to halt a "tidal wave" of counterfeit goods leaving its shores.

"Consumer safety is a zero-compromise issue," Mandelson said, referring to China's assertions that less than 1 percent of China's exports to Europe had alleged health risks. "Even 1 percent is not acceptable."

China's trade chief, Vice Premier Wu Yi, said she was "extremely dissatisfied" with Mandelson's speech, without elaborating.

As part of the nuclear deal with France's state-owned Areva, valued at $11.9 billion, China agreed to buy two pressurized water reactors, which will be built over six years.

Areva and U.S.-based Westinghouse Electric Co. have been vying to build 26 reactors as China races toward a goal of generating 4 percent of its power supply from nuclear plants by 2020. China agreed in July to pay Westinghouse $5.3 billion for four reactors.

Areva chief executive Anne Lauvergeon hailed the deal as "the largest international commercial contract ever won by the French nuclear industry."

China also signed a "framework" agreement to buy 160 aircraft from Airbus, the world's largest commercial-aircraft maker, for around $17 billion. The accord comprises 110 short-haul A320s and 50 A330 wide-body jetliners.

A third French company, Alcatel-Lucent, signed deals for $1 million with China's two largest mobile-telephone providers.

Sarkozy, on his first visit to Asia since his election in May, has made only passing references to rule of law in China, largely avoiding human-rights issues and the matter of the Dalai Lama since he arrived Sunday.

To China's irritation, President Bush and the leaders of Germany and Australia have received the Dalai Lama in the past two months. The 1989 Nobel Peace laureate appears to be finding more open doors in global capitals in the run-up to next summer's Olympic Games in Beijing to push his cause for greater autonomy for Tibet.

Boeing spokesman Proulx didn't seem fazed by China's order to Airbus, which has agreed to open a plant in China to produce A320s.

Over the next 20 years, Boeing estimates, airlines will purchase more than 27,000 new commercial planes, including 3,400 by Chinese airlines, Proulx said.

For the moment, though, exchange-rate issues loom large as Washington and the European Union press Beijing to let its currency, the yuan, climb faster to correct global trade imbalances.

Sarkozy raised the issue, and European Central Bank President Jean-Claude Trichet is likely to follow suit Wednesday at a European Union-China summit in Beijing.

On Dec. 12-13, U.S. Treasury Secretary Henry Paulson will lead a delegation of five Cabinet-level U.S. officials to a new round of strategic economic talks, held every six months, where they will discuss the U.S. trade deficit with China and the slow pace of exchange-rate reform.

(Les Blumenthal contributed to this article from Washington.)

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