By Tamora Vidaillet
PARIS, Dec 2 (Reuters) - French firms doing business with China do not expect a diplomatic row over the Dalai Lama to scupper deals just yet, but analysts see a risk of Chinese boycotts unless problems are cleared up soon.
Beijing last week abruptly cancelled a gathering of European and Chinese leaders, angry over French President Nicolas Sarkozy's plan for a meeting in Poland on Saturday with the Dalai Lama, the exiled Buddhist leader of Chinese-ruled Tibet.
On Tuesday, China berated Sarkozy again, demanding that he cancel the meeting to heal ties between China and the European Union. France holds the rotating EU presidency until the end of this year.
But French companies subjected to Chinese boycotts earlier this year, after the Paris leg of the Olympic torch relay was disrupted by protesters, have played down fears of a repeat.
Supermarket chain Carrefour, the main boycott target, opened two shops in China last week.
European planemaker Airbus, which is headquartered in France, has denied that negotiations with China were hit.
Firms note that German companies were unaffected when political ties with China froze in the wake of last year's meeting between Chancellor Angela Merkel and the Dalai Lama.
However, analysts say Beijing could more easily punish French firms if the atmosphere between France and China worsens.
"They have been trying with the French to deliver some kind of economic hit," said Andrew Small, Transatlantic fellow at the German Marshall Fund think tank in Brussels.
"If relations with France stay in a poor state they can keep that going. Obviously they don't want this thing to persist but in some respects they have the capacity to do it."
FRUSTRATION
That would hurt firms at a time of economic slowdown and aggravate frustration over how Sarkozy has handled ties with China, the country's eighth largest export market last year.
Around 8,000 French companies currently ship goods to China and the value of large contracts in China totalled an estimated 14 billion euros ($17.74 billion) between 2003 and 2008.
French businessmen do not blame Sarkozy for meeting the Dalai Lama, who is branded a "splittist" by Beijing over his campaign for self-determination in Tibet. But some say the president has been clumsy in his dealings with China.
"He has handled the China subject very badly. His main defect is his inconsistency," said Olivier Lefebure, a partner with China-focused law firm UGGC.
Businesses questioned the timing of the Dalai Lama meeting.
"He should have consulted and probably done this in his capacity as French president next year outside of his (EU) presidency," said Joerg Wuttke, president of the European Union Chamber of Commerce in China, during a visit to Paris.
For now, French businessmen hope any damage will be limited. "Commercial and economic relations will be more difficult," said Wang Jiann-Yuh, who heads the France-China Committee of French business lobby Medef.
"But to go from that to contracts not being signed, I don't think it works like that. If it is in the Chinese interest to sign a contract and in the European interest it will happen."
But businesses will be watching developments carefully.
"If the Chinese see relations are going badly, they will become more interested in the competition," said Arnaud Baril, a salesman from one French joint venture in China. (Editing by Estelle Shirbon and Mark Trevelyan)