Protests sour China's $1.7bn Airbus deal

MARY DEJEVSKY

Paris

An Airbus contract worth up to $1.7bn (pounds 1.1bn), a vociferous protest by several thousand people and acerbic cartoons and newspaper editorials marked the start yesterday of a controversial visit to France by the Chinese prime minister, Li Peng.

Mr Li's four-day stay is all that remains of what had been planned as a three-nation European tour. The visit, which was curtailed but not cancelled, is the first by a Chinese head of government for 12 years and only the second by a Chinese leader since the Tiananmen Square killings seven years ago.

Mr Li's reputation as the man largely responsible for ordering the army attack on Tiananmen makes him a difficult visitor in the West and there has been a crescendo of protest in France, culminating in yesterday's protest and march.

Security considerations have dictated that for his three days in Paris, Mr Li is being confined to a small, easily policed area close to the Elysee. Forests of metal barriers are much in evidence. So are large reserves of riot police, as activists fromAmnesty International found yesterday when they tried to unfurl a giant protest banner across the Champs Elysees.

For France's human rights groups, Mr Li's visit is a shameful example of how France's right-wing government, and President Jacques Chirac in particular is prepared to sacrifice principle to the hope of financial advantage. They are joined by opposition MPs, who claim that the late president Francois Mitterrand was tougher on China's human rights record than Mr Chirac appears to be, and by several trade unions, who object to violation of trade union rights in China (but also to the potential competition from cheap Chinese labour).

This united front has forced the government on to the defensive. Yesterday evening, as the only authorised demonstration was gathering half a mile away, the French prime minister, Alain Juppe, went to meet Mr Li at the foreign ministry rather than receiving him at his official residence. The signing of the Airbus deal so early in the visit also suggested a move to demonstrate a practical benefit from Mr Li's presence. Mr Li is to visit the Airbus factory at Toulouse on Saturday.

Government ministers have justified the visit as a chance for France to start catching up on its European partners, the US and Japan, in the race to win a stake in the Chinese market. Handicapped partly by existing defence contracts with Taiwan, France is only the 11th largest exporter to China worldwide, with 1.7 per cent of the market.

Under the agreement signed yesterday, China will buy 10 A320 Airbuses, with the possibility of another 30, and three A340s. If the whole deal comes to fruition, it is the biggest contract China has awarded to a European aircraft builder.

Questions were being asked about the value of other agreements. A contract due to be signed for the establishment of a Citroen plant in Wuhan is to be financed largely with French credits. In addition, a number of hoped-for deals on gas distribution, electric cables and wheat exports were reported not to have been finalised.