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Economy and business in France

In recent years, France's economy has undergone a gradual privatization. Many former state-controlled companies are privatized, but the state still has great control in companies such as Air France, France Telecom, Renault and Thales. State control is also prominent in sectors such as the power generation, transport and defense industries.

Business of France

A number of reform plans have been launched to sustain economic growth and reduce unemployment, which was 10 per cent at the end of 2016. Several of the reform proposals have led to protests and unrest in the labor market.

Business of FranceThere have traditionally been many restrictions on foreign involvement in French companies, but in 1993 this policy was changed and access to foreign investment has increased significantly. One important reason for this change is precisely the need to obtain employment for the many unemployed.

In 2017, France's gross domestic product (GDP) was $ 44,100. Of the GDP, 1.7 per cent comes from the primary industries (agriculture, fishing), 19.5 per cent from the secondary industries (industry, mining, construction, power generation) and 78.8 per cent from the service industries (2017). Corresponding figures for employment are 2.8 per cent in the primary industries, 20 per cent in the secondary industries and 77.2 per cent in the tertiary industries (2016).

Agriculture

According to COUNTRYAAH, France is one of Europe's most important agricultural countries and one of the world's largest exporters of agricultural products. France is the world's largest exporter of wine, and among the largest in wheat, barley and sugar beets. Only just under 3 per cent of the working population are directly employed in agriculture (including fishing), but far more (an estimated 25 per cent) have their livelihoods related to agricultural production. Of the land, 35 per cent is used for fields and 20 per cent for pasture. As in the other industrialized countries, the number of farmers and farms has declined in recent years. The use units have also grown, the average farms are 25-30 hectares, but still a quarter of the farms are under 5 hectares.

EU agricultural policy has promoted the export-oriented part of agriculture, but hit the part of production that has been targeted at the domestic market; this is particularly true of fruit and vegetable cultivation in Midi and western France. These are subject to increased competition from a number of other EU countries. In recent years, this has led to vigorous protests and actions aimed at imported food and more.

Operating mode

Most of the land is run by homeowners, but there is also a significant element of large property and tenant use, especially in Maine, Anjou and Orléanais, south and southwest of Paris, respectively. The properties are in many places divided into small tributaries, a result of the Constitution of 1803. Following a law of 1941, the prohibition of further construction is prohibited. Because of the farmers' conservatism, agricultural organizations have traditionally been poorly developed, and there has been little search for agricultural schools. The use of modern technology has only increased at a moderate pace. As loan opportunities have improved, combined with conditions facilitating more rational operating units, this has resulted in increased mechanization and higher returns.

Production

France is self-sufficient with most agricultural products, with the exception of tropical crops. Of particular importance is the cultivation of cereals, primarily wheat (and barley), grapes and sugar beets. Otherwise, animal husbandry and production of dairy products and wine are very important.

Wheat is mostly grown in the north and especially in the Paris basin, which has good soil and not too high rainfall. Maize production, which is of relatively new date in France, takes place mostly in the southwest and along the lower part of the Rhône. At Rhone delta (Camargue) some rice is grown. The cultivation of sugar beets and potatoes takes place mainly in the northern parts of the country (the regions of Nord-Pas-de-Calais, Picardy and Brittany). Vegetable production takes place mainly near the large population concentrations, but is generally found throughout the country. Early vegetables have become an important export item.

Grapes are grown south of a line from the Loire estuary to the Ardennes. Production is the largest measured in quantity in Languedoc; the finer varieties are cultivated slightly further north, around Bordeaux, in Burgundy and Champagne. In Poitou-Charentes cognac is produced, and in Gascogne armagnac. North of the grapevine's cultivation area are made sides and calvados (respectively wine and spirits made of fruit, preferably apples).

Animal Husbandry

In particular, cattle, pigs, sheep and goats are kept, but also some poultry (chickens, ducks, turkeys). The livestock team matters most in the western parts of the country, especially in Brittany, Normandy and adjacent areas. These areas have a large production of dairy products. Otherwise, the cattle herd is spread over the country, with the exception of the Mediterranean coast, where the summer drought makes such a mode of operation impossible. In the south, a lot of sheep are kept in the mountain areas. Brittany has a significant part of the pig team.

France is usually not entirely self-sufficient with meat, but is one of the world's largest exporters of dairy products such as butter and cheese.

Forestry

Forests cover 27 percent of the area in France. Of this, 56 per cent are deciduous forests and 27 per cent forested. The forest areas are found especially in the mountain districts in the east and southwest, around Paris and in parts of the Loire Valley and Provence. Extensive areas of planted forest (pine) can be found in Les Landes in the southwest. A considerable part of the forest land has been planted since the mid-1800s. Most of the new planting is coniferous forest and takes place on original forest land. Felling in French forestry is not sufficient to cover the country's consumption of timber and forestry products, and France imports timber, cellulose and stationery.

Fishing

Most cod and related species are fished. Otherwise significant breeding of oysters and mussels. In addition, some tuna, herring and sardines, mackerel and shellfish are caught.

Most of the catch is taken in the Atlantic and the North Sea. The main fishing ports are located in Boulogne-sur-Mer and Cherbourg on the Channel coast and Le Guilvinec, Concarneau, Douarnenez and Lorient in Brittany. Oyster breeding takes place among other things around La Rochelle, Île d'Oléron and Arcachon along the Atlantic coast. France has a significant fish processing industry. The consumption of fish is large, and large quantities of fish and shellfish are imported.

Mining

The mining industry contributed 0.4 per cent of GDP in 2004 and employed only 0.3 per cent of the working population. The most important minerals in France have traditionally been coal and iron ore, but mining has been in decline in recent years; both coal and iron ore extraction has been reduced by just over three quarters since the 1960s.

The most important coal areas are in the Nord-Pas-de-Calais region and in Lorraine. In Lorraine there is also one of Europe's largest iron ore fields with phosphorous mined ore. Previously, these deposits made France one of the world's largest exporters of iron ore and steel. The recovery here has been declining since the early 1970s. Other iron ore deposits come from Normandy and Anjou – Brittany. The ore here has a larger iron content, but the deposits are much smaller and have poorer localization compared to the coal deposits.

Other important mineral deposits are bauxite (along the Mediterranean coast), saline (Les Vosges, Jura and Pyrenees) and potash in Alsace. There are also deposits of uranium ore (Limousin), lead and zinc ore (Gard), but these are only extracted to a lesser extent. Oil is mainly extracted in the Paris basin and natural gas in the areas around Lacq in southwest Aquitaine.

There is a large export of iron ore to the iron and steel industry in Belgium, Luxembourg and Saarland in Germany, and a corresponding import of coal from it. Although the German-Belgian coalfield reaches northern France at Lille-Valenciennes and Lorraine, production cannot meet the needs of the French iron and steel industry. Coal production in the other parts of France (substantially in the Massif central) has been declining for a long time. Some lignite is mined in Provence.

The scarcity of coal has become less noticeable after large natural gas deposits were found at Lacq near Pau in Gascony and oil off the coast of Les Landes and in the Paris basin. The gas is distributed via a broadly branched pipe network. As a by-product of gas extraction, sulfur is produced.

Energy

France is not rich in its own energy resources. Traditionally, energy supplies have been secured by the country's reserves of coal, oil and natural gas. In recent years, new energy sources have also been used that have become increasingly important, including the tidal power plant at the Rance estuary in Brittany, hydropower in the mountain areas and nuclear power plants. France has had Europe's most extensive nuclear power development, which has covered more than 75 percent of the country's total electrical energy production. The political authorities have signaled that nuclear power's share will be reduced to 50 per cent by 2035. Nuclear power plants are largely located in the country's outskirts, coastal areas and near the border with neighboring countries.

In 2016, the production of electrical energy was 556 terawatt hours (TWh). The country's 58 nuclear reactors contributed 72 per cent, while 12 per cent was hydropower. Other power generation came mainly from coal and gas power plants (8 per cent) as well as power plants based on new renewable energy such as solar and wind energy (5.5 per cent).

Industry

France is one of the world's largest industrial countries and industrial production is very varied. By commodity value, the food and beverage industry as well as the production of transport equipment, non-electric and electrical machines, metals and metal products are the most important. Less important in economic terms, but well-known is the French production of luxury goods such as fashion items (haute couture), perfumes, glass and chinaware.

French industry is largely a consumer goods industry based on domestic raw materials, and is characterized by relatively small companies. Some branches, such as the iron and steel industry, the weapons industry and the automotive and aerospace industries, are dominated by a few large corporations. The industry is particularly located in the areas around Paris and north to the Belgian border, Alsace, Lorraine, the Lyon-St. Étienne and around Marseille.

The heavy industry has traditionally been associated with the coal and iron ore deposits along the border with Belgium and Lorraine. Another important area is the eastern parts of the Massif central (around St. Étienne and Le Creusot). Since the 1960s, the heavy industry has increasingly been based on imported iron ore, and located at the import ports (Dunkerque and Fos-sur-Mer at Marseille).

The automotive industry is located in most of the Paris area, at Montbéliard and in the Lyon area. After the Second World War, a new automotive industry was established west of the Paris area, including in Le Mans and Rennes and along the Seine to Le Havre. The significant rubber industry in Clermont-Ferrand (Michelin) must be seen in connection with the automotive industry. The shipbuilding industry is located at the estuaries on the Atlantic coast as well as Marseille and Toulon. As in the rest of Western Europe, this industry has declined sharply from the latter half of the 1970s. The aviation industry is particularly located in the Paris area and Toulouse.

The power supply in the Alps has provided the basis for a significant aluminum industry and the production of nitrogenous fertilizers. In terms of both nitrogenous fertilizers and superphosphate, France is a significant producer. Superphosphate production is mainly located in the Paris area. The chemical industry is increasingly based on petroleum, and its location has largely shifted from the coal areas in the north and northeast to the petroleum import ports (Le Havre, Dunkirk, Marseille area). Fertilizers dominate the inorganic products of the chemical industry.

The textile industry, which has developed into a modern large-scale industry, is from old, especially located to the areas to the north (Lille, Roubaix, Tourcoing and Cambrai) and in Alsace. Lyon is known for its silk industry, formerly based on silk breeding in the Rhône Valley, first outcompeted by imported raw materials and now largely replaced by silk and other artificial fibers. Otherwise, there are local textile industry centers in several parts of the country.

Tourism

France is a major tourist country. It is primarily Paris, the Alps, the Riviera and the Pyrenees that attract tourist traffic. Particularly most visited by the tourist attractions in France are the Eiffel Tower, the Louvre Art Museum and the Palace of Versailles, all in Paris and the surrounding area. Recent attractions include the Euro Disneyland family park, north of Paris, which opened in 1992. Winter sports such as Chamonix, Grenoble and Megève are also well-visited. Other important tourist attractions are the country's many cathedrals (Chartres, Rouen, Notre-Dame de Paris), the castles of the Loire Valley and the Burgundy, Champagne and Bordeaux wine districts. In a special position are the many health resorts with hot springs, which are mostly located in the Pyrenees, Alps and Massif central.

Foreign Trade

Machines, cars, aircraft, iron and steel, grain, wine, weapons, raw materials and semi-finished products, chemicals, food and live animals are exported. Main import goods are machinery and transport equipment, raw materials and semi-finished products. Otherwise, energy, especially petroleum, constitutes a significant element of imports.

In 2017, France exported goods for USD 550 billion and imports for USD 601 billion.

Major trading countries are Germany, Spain, Italy, Belgium/Luxembourg, USA and UK.

Foreign trade as a percentage by country (2017)

Country Export Import
Germany 14.8 18.5
Great Britain 6.7 5.3
Spain 7.7 7.1
Italy 7.5 7.9
United States 7.2 5.2
Belgium 7 10.2
Netherlands - 8.3
China - 5.1

Transport and Communications

France's transport network is well developed and generally has a high standard.

The road network

The main road network is substantially oriented towards Paris. The connections between the capital and the districts are well developed, while the roads across the regions are somewhat poorer. The total length of the road is approximately 1,053,000 kilometers (2011). Of this, over 90 percent are paved and about 8,000 kilometers are motorway.

Railway development

The railway development started in 1827. The railways were first run by horses, from 1830 with steam locomotives. The first lines were built at St. Etienne and at Lyon; the first line from Paris was completed in 1837 (to Saint-Germain just west of the city). The railway development started in earnest after 1842, and the radial pattern became, as for the roads, also prevalent for the railway network, which is still evident today. The rail network increased from 1900 kilometers in 1847 to 43 700 kilometers in 1910. After the First World War, railway construction almost stopped, only minor new facilities and modernizations were completed, and these consisted largely of new tunnels that shortened the main lines, as well as improvement in international connections.

After the Second World War, however, significant modernization of lines and carriage equipment as well as technical standards was initiated. Particularly marked is the transition to electric and diesel operation and the strong increase in the speed of trains this has resulted in. A new Paris-Lyon line was put into operation in 1981 for speeds of almost 300 kilometers per hour. Fast trains (TGV, train à grande vitesse) now travel between most major cities. In 1994, the tunnel connection under the English Channel (Eurotunnel) came into full operation and provided faster connection to England.

Aviation

France has significant air traffic. Both Charles De Gaulle and Orly, both outside of Paris, are among the world's busiest airports. Other major airports are Bordeaux (Mérignac), Lille (Lesquin), Lyon (Saint Exupéry), Marseille, Strasbourg (Entzheim) and Toulouse (Blagnac).

Shipping

Throughout history, transport has been facilitated by the many navigable rivers. From the 17th century, channels have been built to improve domestic maritime transport. The first canal that linked two watercourses was the Canal de Briare, between Seine and Loire, completed in 1643. However, the most famous is the Canal du Midi, completed in 1687. This links Garonne (with drains to the Atlantic) with the Mediterranean. The canal building had its major period in the early and mid-1800s, before the breakthrough of the railways. Despite the huge expansion of the railway network in the late 1800s, the transport volumes on the rivers and canals were surprisingly well up, reaching a peak in the mid-1970s (about 110 million tonnes). Since then, the amount of transport has decreased and in 1992 was about the same level as in 1930 (about 50-60 million tonnes).

There are approximately 8500 kilometers of navigable rivers and canals in France, of which approximately 1650 kilometers are navigable for vessels over 3000 tons. The majority of the canals are in the northern and eastern parts of the country, east and north of a line from the Rhône estuary over Lyon and Orléans to Le Havre at the mouth of the Seine. The largest transport volumes can be found on the rivers and canals around Paris and north to the Belgian border as well as east to Alsace-Lorraine and the Rhine. There is a lot of traffic to and from abroad. Largest river port is Paris, followed by Strasbourg and Rouen.

The main ports are Marseille, Le Havre and Dunkirk. Passenger traffic is dominated by traffic to and from the UK, primarily over Calais, but also over Boulogne-sur-Mer and other ports on the canal coast. Overseas traffic is dominated by connections to Algeria and Tunisia from Marseille; the most important connections to Corsica are from Nice and Marseille.

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