French finance minister Bruno Le Maire has warned that the outbreak of the coronavirus should act as a catalyst for France to begin reducing its “dependence” on China for certain goods.
Meeting with business figures on Friday, Le Maire said the crisis would have a 0.1 percent impact on France’s GDP growth in 2020, assuming the outbreak is reaching its peak. While the number seems small, it is significant considering the fact that yearly GDP growth is usually in the small single digits.
Le Maire announced a series of short-term measures to limit the impact of the slowdown caused by the epidemic. The ministry is also looking into the possibility of using the coronavirus as a ‘force majeure’ to allow certain French companies to free themselves from contractual obligations, Les Echos reported.
“We need to grasp this epidemic to question ourselves on our strategic dependence, in terms of supply, on certain industrial sectors,” Le Maire said, pointing to the automobile and health sectors in particular and noting that almost 80 percent of active ingredients for drugs are produced in China.
Ultimately, he said, the coronavirus crisis could be an opportunity for France to “draw good from evil” by fixing vulnerabilities in supply.
Le Maire’s comments indicate that reliance on Chinese goods is all well and good in normal circumstances, but this quickly changes in times of crisis.
Germany also warned on Friday that the coronavirus crisis could impact its economy due to its dependence on Chinese supply chains.
The country’s finance ministry said the coronavirus could “pose a risk to foreign trade developments in the coming months.” Germany stuck to its predicted economic growth forecast of 1.1 percent for the year, however, despite the outbreak.
China’s list of sins against the West has grown in recent times as the US launched an international pressure campaign against tech giant Huawei, warning other countries to steer clear of its 5G products and even threatening that intelligence-sharing could be affected if European nations do not bow to Washington’s demands.
Europe, for the most part, has been reluctant to heed US dictats warning against the use of Huawei products, and Britain recently cleared the way for the Chinese company to become a supplier of some of its 5G network technology. Germany has indicated it has similar intentions.
