Italy Is Gearing Up for Closer Ties With China, Economic Official Says

Italy Is Gearing Up for Closer Ties With China, Economic Official Says

Pan Yinru

Date: Thu, 09/06/2018 - 12:18 / source:Yicai
 Italy Is Gearing Up for Closer Ties With China, Economic Official Says
Italy Is Gearing Up for Closer Ties With China, Economic Official Says

(Yicai Global) Sept. 6 -- The whole Italian government wants to build closer ties with China, not just a bunch of individual politicians, according to one of the European nation’s top economists.

Italy’s Under-Secretary of State for Economic Development Michele Geraci hopes to build government-to-government links between the two countries through a new initiative called Task Force Cina, he told Yicai Global in an exclusive interview last week, while making his first state visit to China.

Italy’s Ministry of Economic Development set up the taskforce last month in hopes of making more dialogue with Chinese authorities, societies and business circles to fortify ties between the two countries, it said online on Aug. 21. The group includes politicians, entrepreneurs, chambers of commerce and even Italian citizens living in China.

The speed of China’s economic transition has given people new knowledge to update traditional development theories, the statement added, saying Task Force Cina will analyze operating frameworks to help Italy catch up with China’s pace of progression and avoid becoming a passive observer as the Asian nation becomes a force to be reckoned with.

Task Force Cina is Italy’s first special working group dedicated to a single country, Geraci said, adding that Italy’s new government is very hands on with foreign policies. He believes that as well as maintaining longstanding ties with the United States and Europe, the new cabinet wants to pay more attention to the Far East. China is one of the main driving forces in global economic development, but Italy’s ties with it are inadequate, he added.

China-Italy Ties

Italy has been paying more attention to trade and economic ties with China since Matteo Renzi took office in 2014, Sun Yanghong, secretary-general of the Chinese Association of Italian Studies, told Yicai Global.

“Last year, Italian President Mattarella visited China, and former Prime Minister Gentiloni also came to attend the Belt and Road Forum for International Cooperation,” Sun said. “Accordingly, relations and economic and trade links have been better off for it.

“After the establishment of the new government in June this year, Italy still cherishes links with China,” he continued. “In particular, Geraci lived and worked in China for a long time before taking office. Having studied China’s development models and economic reforms for quite some time, he has a better understanding of China’s features and a friendly attitude towards us.

“Thanks to his proactive effort, the new government of Italy formed Task Force Cina, aiming to build a national platform that boosts China-related studies and economic and trade cooperation between the two countries.”

Taskforce Goals

The working group will aim to satisfy eight goals, according to the Italian Ministry of Economic Development. These are

  • Encouraging direct and greenfield investment into Italy,
  • Leading Chinese capital into Italian government bonds and private companies,
  • Pushing exports to China and bringing in Chinese tourists,
  • Helping Italian agricultural and food companies localize in China,
  • Pushing green development in both countries,
  • Helping Italian firms join projects associated with the Belt and Road Initiative,
  • Enhancing technology collaboration,
  • Improving cooperation with China in Africa.

These goals are of great importance for a deeper economic and trade tie-up, said Geraci. Italian imports of Chinese goods tallied USD32 billion last year, according to data from Eurostat. Its exports to the Asian nation totalled USD16.3 billion.

One of the areas were Italy needs to improve is e-commerce, he added, saying China has seen rapid development in the sector and Italy hopes to borrow its experience to set up digital payment channels like those in China, such as Alipay and WeChat Pay.

Online retail will also benefit Italian companies and help them market to Chinese consumers, Geraci continued. They can sell through JD.Com, Tmall and other channels, he continued, adding that there is also vast potential for cooperation in infrastructure, high-tech goods and finance.

Task Force Cina will be at the first China International Import Expo in Shanghai this November and the Western China International Fair in Chengdu in September, Geraci said, adding that he is not necessarily interested in deals but wants to express Italy’s desire to work with China. He only brought his foreign policy advisor to China, rather than a large trade delegation.

Mutual Trust

Geraci’s visit to China coincided with that of Italian Minister of Economy and Finance Giovanni Tria, which appears to be no accident. Italian media reckoned that the trips were a big indicator of Italy’s plans to encourage development with support from the world’s second-largest economy.

In order to open up cooperation opportunities, there needs to be mutual trust between the two countries, Geraci said. His plans for now are simple: come to China, carry out surveys and analyse the results, he added.

Italy needs to know in what ways China is interested in teaming up with the European nation, he continued, saying Italy envisions several possibly fields for cooperation and wants advice from Chinese partners to fine tune those ideas into more specific aims.

Italy has long had a trade deficit with China, which Sun puts down to a result of the different development stages the countries are going through and their industrial structures.

“In order to ease the situation, the two countries first need to set up more bilateral agreements and China needs to import more high-tech products and high-end equipment from Italy,” he added. “Second, Italy needs to bring in more encouraging measures to attract Chinese companies to conduct greenfield investments. And third, Italy needs to promote e-commerce links between the two countries so Chinese consumers can purchase more high-quality, ‘made in Italy’ goods online.”

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Keywords: Italy, Task Force Cina, Michele Geraci, Economics