Country Trade Risk Index (ERI) 100.00
National risk reference rating level 3 (3/9)
Country risk outlook stable
Economic and trade risks
In 2012, France’s nominal GDP was 2,028.55 billion euros, per capita GDP reached 31,884 euros, the real economic growth rate was 0.0%, and the inflation rate was 2.2%. As the second largest economy in the European Union, France’s economic growth is relatively weak, its unemployment rate is rising, investment continues to be sluggish, and its economic development prospects are not optimistic. The government has launched macroeconomic policies to stabilize the economy and revitalize the economy, such as supporting small and medium-sized enterprises and implementing reindustrialization. Its effect on the stable development of the French economy in the medium and long term remains to be seen. Affected by the weak economic environment and other structural factors, there is a certain degree of uncertainty in government deficit reduction, and fiscal risks are increasing as public debt continues to rise.
The high unemployment rate is one of the major ills plaguing the French economy. The unemployment rate continued to rise in 2012, rising from 10% in the first quarter to 10.5% in the fourth quarter. The OECD believes that France’s unemployment situation will continue to worsen in 2014.
Investment risk
According to the “2013 Business Environment Report” released by the World Bank, France’s global ranking of business index fell from 32nd in 2012 to 34th in 2013, and its business environment is still among the best in the world. France has relatively developed infrastructure. In 2012, the French government decided to accelerate the modernization and renovation project of the railway network. In 2013, it announced the launch of the transportation expansion and modernization project in the Greater Paris area. The developed infrastructure not only plays a positive role in the stable development of the French economy, but also creates good conditions for enhancing international competitiveness. In addition, France has designed its tax system to improve the business environment and enhance international competitiveness. For example, in 2012, the French government announced that it would extend the R&D tax credit policy introduced in 2008 to the next five years. In December of the same year, the French Parliament passed the Competitiveness and Employment Tax Loan Bill, aiming to reduce labor costs by 20 billion euros. The bill would allow unprofitable businesses to receive tax credits.
Legal risks
France is a country with a sound legal system and a complex legal system. Generally speaking, the French judicial system operates independently and efficiently, but there are also some important areas of law that are too complex and the processing process is too cumbersome and time-consuming, such as labor-related laws. The French government has recognized these problems and begun to implement reforms. In 2006, France implemented a new corporate bankruptcy and liquidation law, which is similar to the U.S. bankruptcy and reorganization law and is conducive to corporate reorganization and liquidation. According to the standards of the World Bank’s 2013 Doing Business Report, after a French company files for bankruptcy, the average time it takes for creditors to collect related debts is 1.9 years, and litigation costs account for 9% of the value of the relevant property, which is the same as the average level of OECD high-income countries. quite. The proportion of debt recovered by creditors through legal actions such as restructuring, liquidation or debt execution accounted for 48% of the debt, which is significantly lower than the average recovery level.
Overall risk
France has a relatively stable political system, and party competition is conducted in an orderly manner within the legal framework. As the unemployment rate rises and social poverty intensifies, the social security situation in France has deteriorated, and the influence of extremist forces has continued to expand, becoming a destabilizing factor in France’s future social and political situation. As the second largest economy in the European Union, France is under dual pressure to reduce deficits and debt and promote economic growth, and its current economic growth is weak.
The economies of China and France are highly complementary and have broad space for cooperation. However, with the European debt crisis still lingering and the French economy in dire straits, France has taken into account the decline in its competitiveness and increasingly sided with the trade conservative camp in the increasing Sino-European trade frictions, taking a tough stance against China. Bilateral trade relations have been adversely affected.
Based on the analysis and assessment of the current overall situation, France’s country trade risk index is (ERI) 100.00, the country risk reference rating is 3 (3/9), the country risk level is low, and the country risk outlook is stable. (Issuing agency: China Export and Credit Insurance Corporation)
