“Harlot, yes, but traitor, never” is a dramatic denouement in anyone’s book, but especially in the face of a French firing squad. Disappointingly, reports of Mata Hari’s final words are probably false, as too was the rumour that, in an effort to distract her executioners, the world’s most famous female spy flung open her coat to reveal her naked glory. The reputational risk, perhaps, of posing a little too often in nothing but a bra and jewellery…
By comparison, France’s latest spy drama lacks a little frisson, despite French Industry Minister Éric Besson adding a martial drumbeat to all the gossip with warnings of “economic war”.
The case relates to the firing of three Renault executives accused of leaking information on electric car battery designs. Although there have been no direct accusations, various media reports have inferred Chinese involvement, possibly through State Grid Corporation, the country’s leading electric power transmission and distribution company (see WiC49).
Unsurprisingly, this has provoked Chinese indignation, and the Global Times was first to be wheeled out to fire skywards in the French direction.
“It is natural for Western society to feel proud and the occasional cheap shot is even understandable,” the newspaper offered magnanimously. “However it is ludicrous to cast China as a thief that grabs any technology it can by illegal means to try and take a shortcut to power.”
Astonishingly for the Global Times, that is precisely the suspicion of many business executives in the West. And so too, it seems, of some in the French secret service, also now investigating the case (Renault is 15% owned by the French state). “This is a classic case of spying,” one spook is quoted as telling Le Point magazine, “the Chinese are masters of this and they’ve gone on the offensive.”
Others query Chinese involvement. For one thing, TV reports have suggested that the suspected espionage was aimed at uncovering Renault’s business model for electric vehicles rather than copying the technology (a more common modus operandi in cases of this type).
Nor do the purported agents fit the mould, says intelligence consultancy Stratfor. Previously, clandestine work has tended to involve first-generation Chinese working as lower-level executives. At Renault, the accused are Europeans with senior management responsibilities.
That might mean the French have jumped to conclusions (not wholly unreasonably, given alleged Chinese involvement in 11 cases of corporate spying said to be uncovered in the US last year, says Stratfor). Four years ago, a Chinese student on a work placement at French car parts maker Valeo was also given a prison sentence for stealing confidential documents.
For the moment, confusion reigns. The sacked employees are angrily denying any involvement (they have counter-sued their former employer). And Renault is supposedly furious with the way the investigation is being conducted by French intelligence. The carmaker’s lawyer complained last week that details were leaked to the media “generally damaged Renault’s image”.
Renault’s PR efforts in China have room for improvement, notes China Business News, following four attempts at establishing joint ventures since 1993. None were consummated successfully (although sister company Nissan has established a more fruitful alliance with Dongfeng, China’s second largest carmaker last year).
The media storm puts Carlos Ghosn, Renault’s chief executive, in an awkward position. Sensibly, he is professing reluctance to comment on the case while the investigation is ongoing. But he will need to tread carefully if Renault is to cash in on the $5.5 billion it says it has invested in the clean car industry. As ever, the Chinese market is anticipated to make up a huge chunk of future demand, even though sales are currently stuck at a (very) early stage. Government subsidies are likely to be an important makeweight in finding a commercially viable route to market. But that is going to require finding a homegrown partner, and accusations of skulduggery today could make it harder to find a decent match in future.
Keeping Track: Quelle horreur! It turns out that Renault’s much-vaunted case of industrial espionage (see WiC94) was nothing of the sort. In a hugely embarrassing development for the French carmaker, all allegations against the three executives accused of selling company secrets to unnamed third parties (but widely rumoured to be Chinese) have been dropped. France’s finance minister, Christine Lagarde has now warned that Renault must face the consequences. “One shouldn’t shoot without a sight or accuse without proof,” she told French radio. Presumably Renault will also be doing its best to smooth relations in China, where state media reacted angrily to French coverage of the affair. (Mar 18,2011)
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.