France Inks Big Deals with China as US Faces Downturn

French President Nicolas Sarkozy is stealing headlines and photo opps in the business press for securing $30 billion worth of orders for airplanes and nuclear reactors during his visit to China. And as part of the deal, he even persuaded the Chinese to make part of their payments in Euros, instead of dollars -- a globally devalued currency. In office a mere six months, the dashing figure he's cutting in China is a painful reminder of how badly the US has been led astray. Now on the brink of a widely expected economic downturn, the US is going to pay for the lack of a coherent and progressive US climate and energy policy over the last seven years.

The Wall Street Journal (subscription req'd) was quick to point out that the deals Sarkozy inked rescued two national industries on the brink of disaster. But the UK press -- The Times, for example -- played the news on the big facts:

President Sarkozy helped to clinch the world’s largest commercial nuclear power contract yesterday, winning an agreement to sell French-designed reactors and atomic fuel worth nearly $12 billion to China.

The deal was struck on behalf of Areva, France's state-owned nuclear energy giant, which is to build two of the world's most advanced reactors (EPRs) for the Chinese. France only has one itself. The only other one in existence is in Finland. The deal, a global record for the industry, also promises delivery of a decade's worth of nuclear fuel and a long-term partnership that could result in a spent-fuel re-processing facility in China.

But that's not all. Sarkozy signed an even bigger deal for airplanes from Airbus -- 160 of them worth close to $15 billion. That brings Airbus about even with arch-rival Boeing on sales of aircraft to China. The airplane factory Airbus will build in the port city of Tianjin is sure to further cement good relations, as will the smaller deals Sarkozy also struck for French telecommunications and pharmaceutical companies.

Now there's leadership for you.

In the US, Sunday's big headline on the front page of NYT's Week in Review section? One word: recession, in big red letters.

You need not be a Wall Street chieftain to feel the anxiety that has wrapped its arms around the American economy. The stock market seems locked in a downward spiral as one bank after another suffers its day of reckoning with bad mortgages. Companies are sharply cutting profit forecasts as the sense takes hold that American consumers are finally too loaded with debt to buy the next flat-screen television.

In a consumer culture, the shoppers somehow know all, even if they can't articulate the litany of accumulating bad news.

Oil at $100 a barrel. Mortgage lenders taking it on the chin. For what? Lending big sums with no money down to people with high credit risk. The big banks doing even worse. For what? Securing their transactions with all that lousy mortgage-backed paper debt. The European markets, also rocked by the enormously bad judgment and greed of their Wall Street brethren. The dollar no longer a robust global currency. A $764 billion trade deficit, mostly with China. Not to mention a prolonged war, which you gotta admit -- freedom fries notwithstanding -- the French were right about after all. We've lost too many years of time securing oil with military muscle rather than developing clean energy and a new economy with brains.

No surprise Black Friday was a bust. It's all enough to make you stop shopping and rethink the American dream.

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