Chinese market plays pivotal role in spurring growth of French companies: business executive

A growing number of French companies consider China an important part for their growth, as highlighted by their increased investment in the Chinese market over the years, said Gary Rosen, CEO of AccorHotels Greater China, during an interview on Monday.

Covering massive business operations in the Greater China region for a French multinational company, Rosen has witnessed the close cooperation between China and France in the tourism and hospitality sector. French companies are increasing their direct foreign investment in China, as cooperation between the two countries have brought unexpected benefits, said Rosen during a program aired on China Global Television Network (CGTN).

"I think the starting point really is -- you see how the two countries work together and they really make an effort to work together, and that comes alive in the business community. Whether you look at different sectors, the growth for both companies, and especially that foreign direct investment into China, you wouldn't have that if you didn't have such strong ties over the last 60 years. And certainly, those are going to continue moving forward. And this trust that has been built between a French company and multiple Chinese companies to make a much wider proposition and growing the hospitality sector in China, that couldn't be done if you didn't have great relations and diplomatic relations, and the recognition by the two countries and the governments of two countries. Many French companies [are] recognizing that China is an important part of their growth around the world. But recognition-the role the Chinese guest and consumer plays as we were talking earlier. The future is a bright one, the strength of the relationship only makes it that much brighter. And I think we've entered a recognition that when you look at these two countries together, you have a 'one plus one equals 10' outcome," he said.

Rosen highlighted the robust growth of AccorHotels in the Greater China region, adding that it is a testament of how the Chinese market has enormous opportunities in store. "There's volume growth and then there's growth where you have to learn and be able to also nurture your own brand's growth. And that's particularly why in this area we focus, particularly when you think about premium and luxury, we have that growth and there's never been for us so much growth and opportunity. We are having records breaking years. In 2022 we had a record-breaking year in terms of new-signings, signings of new hotels. 2023 broke 2022 record. We have signed close to 150 new hotels in 2023 that will open over the course in the next few years. That's significant growth that has put us at the front in terms of global hospitality for players here in China," he said.

As this year serves a year of culture and tourism between the two countries, Rosen expressed confidence in boosting culture and tourism exchanges between the two sides.

With beautiful landmarks, shopping, special food, and with the upcoming 2024 Paris Olympic Games, the CEO believes that France will see more and more Chinese tourists in the near future. He also expressed confidence in Chinese tourism market, which has been on a positive trajectory overall.

"[I'm] very comfortable to say that China is still seen to be by 2035, to be the largest global tourism market in the world. If you look at what the McKinsey's, what the 'big five' [consultancies] are talking about. They're all still in that position and that's a great place to be," he said.

Chinese market plays pivotal role in spurring growth of French companies: business executive

The depreciation of Japanese yen has caused an old coffee shop in Kofu City, Yamanashi Prefecture of Japan to suffer rising financial strain due to surging import costs.

The coffee shop, with a 50-year history, is facing fund squeeze. The owner, 82-year-olld Hajime Yoneyama said that the depreciation has led to increased prices for imported raw materials, particularly coffee beans sourced mainly from Brazil, Vietnam, and Colombia, resulting in a 20 percent surge in purchase costs.

"The purchase price (of coffee beans) has increased by 20 percent. I feel that the prices of vegetables and oil have also increased by at least 20 percent. Now the prices of these things continue to rise, with no sign of stopping. The expenditure situation of the store may become more severe in the future," said him.

Yoneyama said that he had to raise the prices to sustain the coffee shop's operation.

"Recently we had to raise the price. Previously, a cup of coffee cost 500 yen. It's no longer sustainable (without price increases) and now it's up to 600 yen," said the owner.

Furthermore, in an effort to cut costs, the elderly Yoneyama works with just one employee, yet the store business kept crippling. He said that a significant portion of his pension funds is used to cover store expenses and employee wages.

Locals worry that if the weak yen trend persists, the pressure on livelihoods will further intensify.

"The prices of everything are increasing, food, drink, vegetables. It would be great if there was a solution. Medical supplies are also an issue that needs to be considered. I do worry about what the future will bring," said a local resident.

"Not only are labor costs rising, but gas costs are also rising, so operators need to cut expenses, such as advertising expenses, and the work that they originally paid to hire people to do may now be borne entirely by the operators themselves," said another resident.

Japan’s time-honored coffee shop face fund squeeze due to weakening yen