00:00 Also there is our business editor, Charles Pellegrin.
00:03 He's on the line now.
00:05 Charles, one of the major speeches today
00:08 was from France's finance minister, Bruno Le Maire.
00:11 He issued something of a warning about the Chinese economy, didn't he?
00:14 Tell us what he said.
00:16 That's right.
00:19 The warning was not to underestimate the dangerous situation
00:23 that the Chinese economy finds itself in currently
00:27 and its impact on global growth.
00:29 Nonetheless, he reaffirmed that France is keeping
00:32 and will keep its 1% GDP growth target for 2023.
00:37 But he just explained that there would be added caution
00:40 about the international context and what's happening currently in China.
00:44 As a reminder, a number of indicators have come out in the past few months
00:48 signaling that the Chinese economy is underperforming.
00:52 Mostly local domestic spending and retail sales
00:56 are just not where they should be, especially after the government
01:01 lifted COVID restrictions at the end of 2022, early 2023.
01:05 They really expected a big rebound.
01:07 Another cause for concern, the record youth unemployment rate in China
01:12 for people between 16 and 24, over 21%,
01:15 to the extent that the government actually said
01:17 that it would no longer publish these statistics moving forward.
01:21 And finally, there's a real estate sector in China
01:25 that's teetering on the edge of a debt crisis
01:28 and that could have far-ranging ramifications.
01:33 The real estate sector in China represents anywhere between 15% to 30%
01:38 of Chinese GDP depending on different calculations.
01:42 So all this could have an impact on global growth.
01:45 The Chinese government is maintaining its 5% growth target for 2023,
01:49 but it could have an impact on France just in 2022.
01:52 French exports to China were worth 22 billion euros.
01:56 That's about 4.1% of all French exports.
02:00 So clearly there would have an impact if there was a slowdown in China.
02:04 But just the fact that the world's second largest economy
02:07 is not performing as it should is really a cause for concern.
02:11 And Charles, finally, MedEv is wrapping up this afternoon.
02:14 You've been there for both days.
02:16 What would you say the main takeaways are from this year's conference?
02:22 There were lots of discussions about the transition to a green economy,
02:27 to sustainability, discussions of artificial intelligence
02:31 and how it will affect jobs moving forward, how it will affect technology.
02:35 But really what was the talking point for many of the people here
02:38 was the Macron government's fiscal policy
02:42 and fears that taxes could increase because the government is under pressure
02:47 to bring balance back to public accounts
02:50 and to reduce the French government's debt,
02:53 which ballooned over 3 trillion euros in 2023.
02:57 Bruno Le Maire this Tuesday reassured again the people who are present here
03:03 that the French government under Macron will continue to lower taxes
03:07 in the next few years, that it will keep subscribing to this supply-side economics policy.
03:14 He even made a link saying that the lowered taxes of the past few years
03:18 have actually led to increased government revenue.
03:22 So there are still a few steps to prove causation as opposed to just correlation.
03:27 But he's trying to reassure people that lowering taxes is not going to hurt public finances.
03:32 Business leaders I spoke to here are reassured by the words of the government representatives,
03:39 but they're looking now for deeds.
03:41 And there's a bit of a deficit in trust because the government's decided to scrap,
03:45 to cancel the scrap of one particular tax for employers that was scheduled for next year,
03:51 instead staggering it over the next four years.
03:54 For many small and medium enterprises, especially, that's seen as an especially bad surprise
04:00 because they'll have to readjust their calculations moving forward.
04:03 So really fiscal policy was the main concern here.
04:08 Charles Pellegrin at Medef. Thanks very much.
