France probes China link in Renault spy scandal

Friday, January 7th, 2011 | Finance News

PARIS (Reuters) – French intelligence services are looking into the role China may have played in an industrial espionage scandal at carmaker Renault that a senior minister has said involved "economic warfare," a government source told Reuters.

The suspension of three Renault executives, including one member of its management committee, has stoked fears about corporate spying and led the French government to warn of an "overall risk" to French industry.

The executives are suspected of leaking information related to the high-profile electric vehicle program, a key plank of the carmaker's strategy in which, with its Japanese alliance partner Nissan, it is investing billions of euros.

The French President's office asked for the investigation, the source said on Friday. "The Elysee has charged the DCRI (intelligence services) with an investigation. It is following a Chinese lead."

Renault is 15 percent owned by the French state.

France's car industry has previously been targeted by industrial spies, with both parts manufacturer Valeo and tire-maker Michelin affected.

China, where auto exhaust emissions account for around 70 percent of air pollution in major cities, is pushing green vehicles heavily as part of the development of its auto industry.

China's output of electric vehicles is expected to reach 1 million units by 2020, the official Xinhua news agency said late last year.

Mass-market electric vehicle production is still in its infancy. Major carmakers including Nissan, Mitsubishi and PSA Peugeot Citroen have launched electric vehicles in recent months, but the numbers on the roads remain in the thousands.

Beijing launched a pilot program in June to hand out rebates to electric and hybrid car buyers as its stepped up its efforts to cut emissions, and it is due to present a draft plan setting out billions of yuans of investment in the sector.

French Industry Minister Eric Besson told journalists on Thursday that the expression "economic warfare" was appropriate in describing what was involved in the Renault case.

(Additional Reporting by Helen Massy-Beresford, Fang Yan and Gilles Guillaume; editing by Noah Barkin)

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