To catch up with the Japanese and Americans, France will also develop its own hybrid diesel-electric cars. To stay ahead in the digital telecommunications world, Paris will spend millions to research ways of broadcasting high-definition television to mobile phones.

And to discourage excessive dependence on imported petrol, France will study ways to enable the country's households to generate their own electricity, with some pundits joking that the Eiffel Tower may just be turned into a wind turbine.

It may smack of state-sponsored capitalism a la China and Singapore, but Mr Chirac seems to have a more modest and typically pro-esprit de corps aim.

'This is the best response to outsourcing. It is essential in order to hold our rank,' he said.

Mr Chirac's Six Pillars of Economic Innovation may not exactly be patterned after former president Jiang Zemin's Theory of the Three Represents, although they both reek of centralised planning and market interference. But, then again, France is famous for, if not even proud of, its dirigiste tradition.

What intrigues us is that, despite the economic problems back home, French banks and financial services companies are among the most innovative in the world. French universities produce top business administration students who are snapped up by financial institutions even before they graduate.

A World Trade Organisation report says France is among the world's top five exporters of commercial services, such as transport, finance, travel and communications. With a global market share of 4.7 per cent, it only tails the US, Britain, and Germany and leads Japan. By contrast, China's global market share in commercial services is only 3.4 per cent, while Hong Kong has 2.5 per cent.

France's trade deficit of US$30 billion and current account shortfall of US$43.5 billion for the past 12 months may sound enormous, but they are nothing relative to the comparative figures of US$121.5 billion and US$57 billion for Britain, and US$798 billion and US$805 billion for the US.

However, its budget deficit as a percentage of GDP, which stood at 3.2 per cent last year, is higher than the eurozone average of 2.9 per cent. Hence, more government spending on some redundant economic-engineering will only swell public debt in France.

This lesson should have been clear from Prime Minister Dominique de Villepin's pseudo-socialist experiment last year, when he spent millions of euros to employ young workers.

The populist measure did improve the employment rate, but it was only a temporary fix to a structural economic problem, largely due to a rigid labour system and an almost xenophobic paranoia over acquisitions of corporate jewels by foreign companies.

Despite the millions that Mr de Villepin poured into his jobs scheme, Paris eventually erupted into student-led riots as the initiative proved unsustainable.

Mr de Villepin's overconfident - some say bureaucratically arrogant - efforts to chip away at France's fossilised labour regime ended up in blood, sweat and teargas. But Mr Chirac's subsequent retreat will only heighten the inevitable pain of economic restructuring that the country desperately needs.

To France's powerful labour unions, a favourite bogeyman is the Polish plumber who has come to flush locals out of domestic jobs. Never mind that there are probably fewer than 10 Polish plumbers in Paris, according to an estimate by a French newspaper.

Most French people fear that a flood of cheap workers from the 10 new European Union countries will steal their jobs - and the comfy pension they expect to receive upon retirement. But a recent EU report says workers from the new members have actually helped ease skills shortages in Ireland, Sweden and Britain - the only nations that lifted immigration restrictions in 2004.

These three pioneers will be followed by Spain and Finland this month, while Austria and Germany will continue to bar eastern European workers.

To its credit, France will slowly ease restrictions on workers from the new EU members by scrapping work-permit requirements in 60 job areas, including the hotels, restaurants and construction industries, where acute labour shortages have cramped growth.

Perhaps this is where France's economic salvation lies. Instead of spending millions studying how to transform the Eiffel Tower into a giant wind turbine, it could simply plug into the rising economic powerhouse that is eastern Europe.