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Longchamp eyes China expansion

French luxury handbag maker Longchamp is eyeing a huge expansion in China despite the country's economic slowdown, its chief executive said as the firm opened a new store in Hong Kong Wednesday.

The 64-year-old family-owned brand, famous for its coloured fold-up nylon and leather totes, said it was optimistic about the Asian market, especially China, as European economies – its main markets – remain "unfavourable".

"We have no intentions to slow down our expansion plans, especially in Asia," chief executive Jean Cassegrain, a grandson of the founder, told AFP.

He said he had no concerns about China, adding:  "The purchasing power of Chinese consumers continue to increase and it is not going to change" even as the Asian powerhouse's economy slowed.

The 400-square-metre (4,300-square-feet) outlet is Longchamp's second mega store in Hong Kong and is located in Kowloon, one of the city's busiest shopping districts where mainland Chinese tourists flock to splurge on luxury goods.

Cassegrain said Longchamp is looking to expand its current presence of seven stores in mainland China – including Beijing and Shanghai – to about 40 to 50 stores, although he could not specify a timeline.

"The challenge is to pick the right locations," he said, adding that Longchamp has appointed popular Chinese actress Gao Yuanyuan as its ambassador to boost the brand's profile in the region.

China's economy expanded 7.6 percent in the second quarter of this year, its worst performance in three years, and disappointing data since then has led to fears that third-quarter growth may have weakened further.

Third-quarter data is due out on Thursday. Longchamp saw turnover of €390 million ($507 million) last year, up 22percent from a year earlier.

China is set to become the world's second biggest market for luxury goods after the United States by 2017, overtaking France, Britain, Italy and Japan, consumer research group Euromonitor said in a report this month.

Luxury-good sales could top $302 billion worldwide this year, up 4.0 percent from 2011, driven by demand in emerging economies, according to the report.

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CHINA

Xi arrives on French Riviera as Macron seeks united EU front on China

Chinese President Xi Jinping visited Monaco on the French Riviera Sunday seeking to press ambitious commercial goals ahead of talks with France's Emmanuel Macron who is trying to forge a united European front to contend with Beijing's advances.

Xi arrives on French Riviera as Macron seeks united EU front on China
Chinese President Xi Jinping, his wife Peng Liyuan, Princess Charlene of Monaco and Prince Albert II of Monaco, stand in front of troops at the Monaco Palace. Photo: AFP

Xi arrived at the airport of the resort city of Nice accompanied by his wife Peng Liyuan to be welcomed by French Foreign Minister Jean-Yves Le Drian and an guard of honour.

Prior to meeting with Macron, Xi went to the nearby principality of Monaco, where he was received by Prince Albert II and where a government spokesman said bilateral talks would “address economic and environmental issues”.

Xi, who has made establishing China as a global player central to his government, travelled from Italy, whose government became the first G7 state to sign up to his landmark new “Silk Road” infrastructure project, a massive undertaking to join Asia to Europe.

Washington and some EU states fear the huge project will give China too much sway. But Xi says it would be a two-way street of investment and trade.

Germany criticised Rome over its participation in the new Silk Road project.

“In a world with giants like China, Russia or our partners in the United States, we can only survive if we are united as the EU. And if some countries believe that they can do clever business with the Chinese, then they will be surprised when they wake up and find themselves dependant,” Foreign Minister Heiko Maas told Welt am Sonntag newspaper.

The EU's German budget commissioner, Günther Oettinger, told the Funke newspaper group that Europe should ensure it retains its autonomy and sovereignty when dealing with China.

He expressed concern that already “infrastructure of strategic importance … are no longer in European but in Chinese hands.”

French Finance Minister Jean-Yves Le Drian had remarked Friday that “Silk
Road cooperation had to go “in both directions.”

Amid tight security, Xi and his wife were Sunday evening to join Macron and his wife for a private dinner at nearby Beaulieu-sur-Mer overlooking the Mediterranean during which they would have what a Chinese official termed “a deep exchange of views on Sino-French, Sino-European relations and international and issues of mutual interest.”

Xi's official visit to Paris on Monday will mark 55 years since Charles de Gaulle established diplomatic relations with Beijing.

A series of cooperation deals on nuclear power, aerospace and clean energy initiatives, some involving lucrative contracts, are expected to be signed.

On Tuesday, Macron and Xi will be joined by German Chancellor Angela Merkel and EU Commission chief Jean-Claude Juncker to explore “points of convergence” ahead of an EU-China summit in Brussels next month.

As well as addressing commercial cooperation and strategic issues with Xi, Macron has also been urged to deal with the case of Chinese former Interpol head Meng Hongwei.

Meng's wife has had no news of her husband since his arrest in China nearly six months ago and it emerged Sunday she has written to Marcon asking him to bring up his disappearance with Xi.

He is believed to be facing corruption charges.

But Xi's visit poses a particular challenge for Macron, who wants to deepen EU ties with China while also pushing back against Beijing's growing global clout.

Europe's distrust of Chinese telecom giant Huawei, which is poised to become the dominant player in next-generation 5G mobile technology worldwide, is emblematic of the increasingly rocky relationship.

Monaco, which notably is eyeing a share of Chinese luxury tourism and has its own foreign policy, only last year signed an accord with Huawei to make the principality the first country entirely covered by the company's 5G mobile network by year end.

Macron has lauded the EU's “awakening” to the challenges posed by China, which the bloc now labels a “rival” despite being Europe's biggest trading partner.

“The reality is that the world has changed significantly — China is not the country it once was, and we are dealing with a very major partner,” a Macron aide said ahead of Xi's visit.

The US is pressuring European allies to not use the Huawei technology, saying it creates a security risk by potentially letting Beijing snoop on sensitive communications.

But France has not ruled out using Huawei gear.

Beijing has accused Washington of trying to escalate President Donald Trump's trade battle with China.

Despite the many sources of friction, France wants to engage China as a closer partner as Washington makes a pointed withdrawal from global affairs under Trump's “America First” policy.

For example, Macron may seek more Chinese support of the French-backed G5 Sahel force fighting Islamist extremists in Western Africa.

China has been investing heavily in a diplomatic offensive across Africa, promising to help build infrastructure projects as part of the new Silk Road initiative.

Aides say Macron will press Xi to ensure such projects are fair and explore the participation of French companies amid allegations the deals could load African countries with unsustainable debt. 

READ ALSO: 'This will only help China': France furious after EU derails train-merger

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