“The days where the Chinese can produce the equivalent of an Airbus A320 are going to be dark days for Europe and for France.”
Odd Lots · Money & Markets · October 2026
Asked how exposed France is to a second China shock, Vallée says much of France's deindustrialization has already happened, so it is less exposed than Germany. Aerospace is the exception: an industry where China doesn't compete yet but might.
Transcript
…inevitable part of the adjustment process, as well as I think pension reform is an inevitable part of the adjustment process on the spending side. And so I think we have these two sacred cows that we'll probably have to sacrifice in order to deliver any meaningful adjustment over the coming years.
…of China trade question in the context of Germany, and that's huge there. What is the version of that in France these days? And how much similar anxiety is there about, I guess, French Political giants, et cetera, and their own exposure to surging Chinese exports of higher value, added value goods?
…occurred in France already. It is occurring now in Germany. And so to some extent, this is a fight that France has already lost. France is a lot more than Germany, fundamentally a service-based economy. The one worry I think that France rightly has is is in the aeronautical business, which remains a very important French Political, and one where China is not yet competing, but where it might. The days where the Chinese can produce the equivalent of an Airbus A320 are going to be dark days for Europe and for France. And so I think the worry, even though for the auto sector, which is at the heart now of the fight, you know, there's not a, you know, a central concern for France, the worry is that, you know, that, you know, moves an entire industrial landscape in Europe that could end up, you know, being pretty detrimental to France too.
So in classic debt crises, you often need some sort of circuit breaker to put a stop to the dynamics that are making debt deteriorate and then everyone getting more worried and then the debt deteriorates further, etc. With the original Eurozone crisis, that was the ECB's famous whatever-it-takes…
I think we will need two things. One is we will need to have some national consensus emerging on fiscal policy. And, you know, I said some critical words earlier about the German dead break, and I stand by that. I think the German dead break was poorly designed. But I think the good thing that…
Jehanne Vallée, thank you so much. That was an excellent description of what's going on. Really appreciate you coming on Oblots. Maybe we'll talk again around election season.
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