TheChek News Flow

Two leaders stress need for multilateralism amid rising trade tensions

France’s President Emmanuel Macron has warned of the risk of the “disintegration of the international order” as he met Xi Jinping in Beijing amid growing trade tensions between China and Europe.

“We are facing the risk of the disintegration of the international order that brought peace to the world for decades. In this context, dialogue between China and France is more essential than ever,” Macron said on Thursday after talks with the Chinese leader.

“We have many ways of convergence,” he added. “We sometimes have disagreements, but we have the responsibility to know how to overcome them . . . for an effective multilateralism in which we believe.”

Xi earlier called on Macron to “hold high the banner of multilateralism” and prevent others from interfering in their countries’ relationship, in remarks ahead of the bilateral talks.

The Chinese president’s comments at the Great Hall of the People were a veiled reference to charges that European policy towards China is being influenced by a hawkish US administration under President Donald Trump.

“China is willing to work with France to always proceed from the fundamental interests of the two peoples and the long-term interests of the international community and eliminate all kinds of interference,” Xi told Macron

Macron’s visit to China is his fourth since he became president in 2017, and comes as he is set to take over the G7 presidency in 2026, when addressing global economic imbalances will be at the top of his agenda.

Tensions have been growing between Beijing and its European partners over China’s soaring trade and investment imbalances and export-led growth.

China’s export controls on rare earths, whose production it dominates and which are vital to industries from automobiles to defence, are also an acute concern for European countries.

In comments later on Thursday, Xi said he and Macron had agreed to greater co-operation in industries such as aerospace, nuclear energy, biopharmaceuticals and artificial intelligence as well as other areas such as panda conservation and “global governance”.

Xi said China’s next five-year plan, which is due to be formally released in March, offered opportunities for French industry despite Beijing’s repeated emphasis on industrial self-reliance.

“China’s door to openness will only widen,” Xi said.

Xi also reiterated China’s position that it supported peace in Ukraine, but did not mention European demands that a ceasefire precede any peace talks. France has been keen to encourage China to act as a mediator in the Russia-Ukraine conflict, but has had little success.

The talks came as a judge in France is expected to rule this week on the government’s proposed three-month ban on China-founded fast fashion and ecommerce retailer Shein’s operations in the country, after illegal products were found on its marketplace.

China has also opened anti-dumping investigations into European products. While a probe into cognac exports has largely been resolved, others — notably on EU dairy products — are under way, with decisions on additional tariffs expected within the coming weeks, according to industry leaders.

France must cut spending to tackle deficit, urges state auditor

Pierre Moscovici warns politicians not to rely on taxes in race to agree budget for 2026

France’s politicians must shift their focus from raising taxes to spending cuts to tackle the country’s deficit, the head of the state auditor has warned, as politicians struggle to agree on a 2026 budget.

Tax debates in parliament have dominated recent budget discussions, leaving little room for debate on public spending, with the government potentially adding to France’s vast expenditure by suspending President Emmanuel Macron’s pension reforms until 2027.

Pierre Moscovici, head of the Cour des comptes, told the Financial Times that the pendulum needed to swing back if France is to trim its deficit to an EU-imposed target of 3 per cent of its output by 2029.

“To achieve a satisfactory public finance trajectory, the focus must be primarily on savings and spending, and secondarily on taxation. Yet I observe that the entire budget debate is doing exactly the opposite,” Moscovici said in an interview.

The Cour des comptes audits all aspects of public spending in France, including recently admonishing the Louvre for prioritising investing in artwork over security, after the theft of France’s crown jewels last month.

Moscovici’s warning comes as France enters final negotiations to pass a budget by the end of the year.

Failure to do so would not be a “catastrophe” but “France would miss its trajectory [to reduce the deficit by 2029] and stay on a spiral of increasing debt and debt loads, which will gradually prevent it from investing”, the former Socialist finance minister added.

In France, public spending made up 57 per cent of GDP in 2023, the most of any major European economy. The country’s deficit is the third highest in the EU, after Romania and Poland, and is expected to be 5.4 per cent in 2025. France’s high debt-to-GDP ratio has led to reprimands from Brussels and a series of credit downgrades from rating agencies.

Since legislative elections in June 2024 created a bitterly divided National Assembly, successive governments have struggled to find consensus on public finances, with proposals to cut spending proving particularly unpopular.

Michel Barnier was swiftly ejected as premier last year after two-thirds of his budget measures focused on reducing state spending — including cutting teaching staff — while his successor François Bayrou also failed to win backing for proposals including cuts to medication subsidies.

Prime Minister Sébastien Lecornu has suggested reductions in medical subsidies, ministerial spending and keeping a lid on regional spending as well, but he is primarily pulling fiscal levers to negotiate a compromise budget that would reduce the deficit to roughly 5 per cent of GDP in 2026.

Lecornu needs backing from the centre-left Socialists to survive and pass his budget, which opened the floodgates in recent weeks to a series of new tax proposals, including levies on the biggest companies.

But the initial rejection of fiscal measures in a vote last month meant parliament was unable to debate spending measures.

If deputies fail to reach an agreement the government will probably propose a special law by December 19 to roll over the 2025 budget and avoid a US-style shutdown.

But this is an imperfect solution, which does not allow for any new spending measures, such as Macron’s desire for a €6.5bn rise in defence spending over the next two years.

“The special law is the status quo. In terms of public finances, in a period of transformation, that’s never good. That’s the reason I personally would clearly prefer that a budget is passed,” Moscovici said.

Moscovici said France’s prospects of having a budget would come down to whether parties saw more political benefit from providing economic stability or avoiding compromise with opponents: “In terms of rationale, it’s purely political now.”

Parliament’s ability to reach a deal is still in doubt, with Macron’s former premier Edouard Philippe this week endangering the social security bill that would suspend the pension reform by saying his 34 deputies could not vote for the text.

As France prepares to take over the G7 Presidency in 2026, Moscovici said the country was “far from a financial crisis” but its struggles to reduce its debt load could lead to France being “relegated” on the world stage. “We can’t claim to be a leader if we are not exemplary,” he said.

The rise of humanoid robots threatens political disruption

Our delighted faith in the automatons raises the question of how they will integrate into human society

For over half a century, the International Robot Exhibition (IREX) has served visitors an exquisitely balanced cocktail of pragmatism and prophecy. The missing component, all of a sudden, is politics.

The biennial trade show, held since 1974 in perennially robot-fixated Japan, is first and foremost a showcase of industrial automation — the no-nonsense factory and farm machines that have steadily proliferated. Globally, according to the International Federation of Robotics, companies installed well over half a million of these in 2024; 54 per cent in China, which has, non-coincidentally, spent over a decade as the world’s biggest producer of industrial robots.

But the tone and pizzazz of IREX has always been provided by the humanoids. It’s a somehow thrilling spectacle to see robots that look a bit like us, sort of doing things we can do, with the half plea, half promise that they will do so much more — and better — in the indefinite future. 

By instinct, Japan has led the world in delighted faith in these humanoids, adopting an endlessly patient parental view that, however expensive, immature, incompetent and work-shy the automatons may appear now, the little darlings will eventually grow up and take their place in society. 

Societies, meanwhile, seem wholly unprepared for this graduation, and the political sphere has not even begun to have the sort of debates that may very soon be forced upon it.

That needs to change urgently. For two glaring reasons the 2025 IREX, which opened in Tokyo yesterday, felt fundamentally different from its predecessors. The first arises from the nature of the technological progress made since 2023, and the predictions clustered in the background. 

Artificial intelligence has advanced rapidly, and appears — to the most optimistic eyes — poised to fill gaps that humanoid service robots have demonstrated in their long stumble towards usefulness. The focus is now less on their physical limitations (although those are steadily falling away), and more on how effectively they can be deployed as vectors for the visibly less limited competencies of AI. 

Analysts advising investors on the megatrends of the coming year are hot on the humanoid trail. In a research note, Macquarie analyst Daisy Zhang wrote that 2026 would mark an “inflection year” for humanoid robots and their worldwide commercialisation. Zhang forecast annual humanoid robot sales to hit 50,000 units next year, rising to 1.1mn units a year in 2031. By 2034, she wrote, the “humanoid robot penetration rate” — the number of robots per 10,000 human factory workers — would exceed the rate for industrial robots.

In a research note last week, analysts at Morgan Stanley proclaimed that the transition to “embodied AI” marked a pivot in history, forecasting a global humanoid robot market worth $5tn by 2050 and a deployment rate of one machine for every 10 humans. Investors should be very cautious; the history of robots reveals an industry capable of creating a mismatch between promise and reality.

The second striking aspect of IREX 2025 was that, while Japan is still a big player in industrial robots, the robot enthusiast baton has been passed to China, which now dominates in humanoids. The Unitree H2, the AgiBot G2, the UBTech Walker S2 — name the android striding towards humanity, it is Chinese. Even Tesla’s imminent Optimus Gen 3 is estimated to mostly comprise Chinese parts.

The looming political problem here, closely entwined with AI, is that if the inflection point prophecies for humanoid robots are even half correct, labour markets, economic balances, cultural norms and a great deal more face stunning disruption. The phrase “Freedom from work”, as the slogan for one Chinese roboteer goes, may sound alluring; mass unemployment, for which it may turn out to be a euphemism, less so.  

The intriguing possibility is that, while China may have emerged as the great robot-maker, Japan is wealthy enough and robot-friendly enough to become one of the first big democracies to experiment with widescale humanoid robot adoption. 

In theory, some argue, Japan’s shrinking population and strained labour force will create less resistance to mechanised replacements for humans. It needs them, and many may actively prefer steel and semiconductors to foreigners and work visas.

But when a robot-engendered crisis arises, the political world needs a way to talk about the new arrivals. The temptation will be to frame this in the same terms as the immigration debate — all the more so if the humanoids are identifiably foreign in their manufacture. That remains to be seen. Robophobia, though, has every chance of emerging as a legitimate, vote-winning political position.