The Bilateral Summit

Italy-China, economic dialogue in support of business resumes

With Prime Minister Giorgia Meloni's mission to Beijing, we are back to talking about what is most useful to do to rebalance the trade balance and foster industrial partnerships

by Rita Fatiguso

29 July 2024

Il presidente cinese Xi Jinping e il primo ministro italiano Giorgia Meloni, durante il vertice bilaterale Italia Cina un incontro a Pechino

3' min read

Key points

Market dynamics
Sector opportunities

3' min read

The Business Forum, now in its seventh edition, is back, but no fewer than 115 Italian companies and business associations had the opportunity to participate in the investment round table organised by the Italian Chamber of Commerce in China and Confindustria on the occasion of Prime Minister Giorgia Meloni's visit to Beijing. The age-old theme of the trade imbalance with Beijing returned, but there was also a glimpse of the opportunities to be seized in a market like China's, which is worth one point of GDP.

Market dynamics

In fact, ISTAT estimates a stock of Italian foreign direct investment in China of 15 billion euros, of which over 1300 manufacturing investments, with 130 thousand employees and a turnover of 33 billion euros. According to the Centro Studi Confindustria, the export potential that we can still fill in the Chinese market is Euro 2.4 billion for consumer goods alone and Euro 2 billion for capital goods.

Important dimensions linked to entire supply chains represented in the Forum 'Italy investing in China: trends and perspective'. there were Anfia, Assica, Farmindustria, Federmacchine, and Sistema Moda Italia who presented visions and prospects in relations with their Chinese counterparts. This consistent participation shows that there is room for exports with 2.4 billion in consumer goods and 2 capital goods. "Italian foreign direct investment stocks in China amount to over 15 billion euro," confirmed Lorenzo Riccardi, President of the Italian Chamber of Commerce in China.

Sector opportunities

The panel on investments delved into market dynamics to increase trade, in particular to boost Italian exports so as to rebalance the trade balance, and to foster industrial collaborations. A topic in which the big names on the board of the Italy-China Business Forum can act as a driving force.

'China continues to prove to be strategic for Italian exports: Beijing ranks among the top destinations for Italian exports globally, being the main market in Asia and the second among non-European countries, after the United States,' added Lorenzo Riccardi, President of the Italian Chamber of Commerce in China.

Meloni con la figlia a cena in un ristorante di Pechino, video rimbalzano su social

For Roberto Vavassori, president of Anfia, 'there are very specific supply chain competences present in Italy, and there are reasons that suggest a rebalancing between direct investments, so far made by Italian companies in China, and those of Chinese companies in Italy with a gap, according to data provided by ICE-Agenzia, of about 5 billion euro to be bridged'. "A figure that," according to Vavassori, "leaves room for the presence of at least one vehicle manufacturer in Italy". Assica emphasised that, despite the fact that the Chinese market is closed to the import of pork products due to African swine fever, 'China remains a country to which it exported 60 million euros up to two years ago, so it is to be hoped that the possibility of exporting can soon be resumed on the basis of health protocols shared between Italy and China with the commitment of the institutions of the two countries'.

For Farmindustria, China is Italy's second non-European partner after the USA in the pharmaceutical industry and is pushing hard for investment in the sector, also guaranteeing greater patent protection. Important Italian companies have been active in China for several years and can grow further. This is also why the current mission is of strategic importance.

For Federmacchine, China was the fourth largest market in 2023 with almost €2 billion of machinery purchases. Despite a slight drop in Italian exports of the sector to China and some policies that do not facilitate trade, the Association highlighted the great opportunities offered by this market and collaboration with Chinese companies.

Finally, Sistema Moda Italia said it was in favour of 'free trade' in international trade as a pillar of competitiveness, but emphasised the importance for the textile-clothing sector of fair and advantageous trade relations for Italian producers, respecting the 'level playing field' and the rules of safety, traceability and quality of imported products, especially e-commerce products, as defined by European standards.