As we celebrate the 130th anniversary of diplomatic relationships between France and Korea, 2015 and 2016 have been very rich in high level meetings. Following the State Visit of President François Hollande last November, President Park Geun Hye is currently on a State Visit (the first in 16 years!) in France from June 1st to 4th. These meetings at the top are great impulses to strengthen the ties between both countries’ companies and economic institutions, especially regarding creative economies. In November, the two Presidents adopted an action plan to foster closer economic bonds in 6 areas, among which start-ups, tourism and transportation. This new gathering should be the opportunity to open new doors of collaboration.
At the heart of this effort to bring France and Korea closer, David-Pierre Jalicon, Yongmaan Park and Jean-Paul Vermès, respectively Chairmen of the French Korean Chamber of Commerce (FKCCI), the Korea Chamber of Commerce and Industry and the Chamber of Commerce of Paris-Ile-de-France will sign today a tripartite agreement to promote trade and investment between the two countries by exchanging market information and business opportunities. This MoU falls in with the movement stimulated by the France-Korea Year which creates bridges between French and Korean players in various levels: political, cultural, economic and academic.
President Park Geun-hye meeting David-Pierre Jalicon, FKCCI`s Chairman, and other foreign business leaders (FKCCI)
If these years are a great momentum to boost French and Korean collaboration, this growing trend is not new. As President Hollande was stating last November: “since 10 years, French and Korean relationships have known an impressive growth as our commercial exchanges have doubled since 2006!” Trade figures between France and Korea (€8 billion in 2014) are indeed experiencing an extremely positive growth, further strengthened since 2011, when the Free Trade Agreement between the European Union and Korea entered into force. Since the FTA, FKCCI’s number of Members has increased by 65%, from 200 to over 340. Just in 20 years, Franco-Korean trade volume tripled, while expanding to new sectors such as aeronautics, motor vehicle industry, electronics, food processing, etc. But France is far from only being a supplier of Korea: the value of its investments in the country represents €8 billion with 200 businesses located in Korea representing 24,000 jobs. France has always been promoting a partner-oriented approach in Korea with some 50 joint-ventures, 15 joint-research laboratories and numerous global sales agreements, many of which record important successes both on Korean soil and in third-party countries. French companies have also historically contributed to the development of Korea since the 1970s. For instance, Alcatel built up Korea’s first telecom networks in the 1970s; thirty years later Alstom established the first high-speed railway lines in Korea. Nowadays, France’s presence in Korea has seen the arrival of numerous SMEs and entrepreneurs choosing the Korean adventure. The French Tech Hub, launched in March 2016 to help French startups to settle in Korea, is a good illustration. These statistics reveal France and Korea’s dynamism.
Indeed, despite the crisis that the country has been undergoing, France is the sixth largest economy in the world by GDP, one of the most influential members of the G7 and G20, and the second largest market in Europe with more than 66 million consumers. France is the land of 17 major groups among the 200 largest in the world, with leaders of international reputation in all sectors : aeronautics, space & defense (Airbus, the world’s first plane-maker, Thales, etc.), banking (BNP Paribas, Société Générale and Crédit Agricole, three of the seven largest banks worldwide), motor vehicle industry (Renault, the 4th largest car manufacturer worldwide and 1st foreign investor in Korea, Valeo), and of course luxury goods (Louis Vuitton, Hermès, Chanel, L’Oréal).
Moreover, a large number of very high-potential startups are created every year in France, such as Sigfox, which deploys an energy-saving low-speed network dedicated to connected devices worldwide, or Criteo, an online advertising retargeting firm listed on Nasdaq. France is Europe’s number one country for newly founded businesses, with more than 550,000 created in 2014. These numerous players, large and smaller, allow France to be at the forefront of technological innovation. At the January 2016 edition of the Consumer Electronics Show in Las Vegas, France was the second leading nation after the United States by the number of exhibiting startups (128). Many of these young firms have gained a worldwide reputation, like Sigfox (Internet of Things) or Parrot (drones, Internet of Things).
Over the last years, France has carried out several structural economic reforms in order to reinforce the competitiveness of its companies and the attractiveness of its territory. Introduced in 2013 and 2014, the “Competitiveness Pact” and “Responsibility and Solidarity Pact” enable French companies to save €30 billion on taxes and social charges a year. The French corporate tax rate will also be gradually lowered to 28% in 2018, making it one of the lowest in Europe. A wide set of deregulation measures has also been launched to promote more competition in the industry and services. According to the OECD, all these reforms will increase the French GDP by nearly 4% over the next 10 years.
Given all this, the FKCCI is confident that collaboration between France and Korea is to keep on growing with these extremely positive trends of diversification, in terms of sectors but also size of companies. The State Visit of President Park Geun Hye will be a great opportunity to observe French and Korean assets and strengths and reflect on how to make them coincide through deeper cooperation.
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