“China is an important market for Made in Italy” – Corriere.it

“Soft”, like rubber that is softer than tyres: this seems to be the reaction in Beijing at the moment to the Pirelli case. But it is clear that a change to the “hard” version is being prepared behind the scenes. The Chinese press waited several days before analyzing the Italian government’s decision to use “golden power” to limit Sinochem’s governance powers in the Bicocca group. “Italy urged not to generalize the concept of national security,” writes today Global Times, Communist Party newspaper, in an article in the «Diplomacy» section. There are no political statements, the newspaper uses the comment of Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, convinced that the Italian tire industry is so mature that there is no need to fear on the safety front technological. The conclusion, however, is sharp: «The Italian move undoubtedly unreasonably stifles a Chinese company». The article goes on to recall that the Chinese market is important for Made in Italy and the repercussions can be serious.

Tell the Courier Dr. He Jun, director of macroeconomic research at the Chinese think tank Anbound: «It is certainly not good news for companies and the government in Beijing. The question is whether there is a big change in the “business environment” in Italy. This incident with Pirelli may lead to a re-evaluation of investments”. Anbound is an independent think tank (as any business in China can be), it also provides its geopolitical and macroeconomic analyzes to members of the government establishment. He Jun continues his analysis: «As the first shareholder in the Italian company Sinochem will certainly defend his legal rights, based on Italian law and those of the markets. The Beijing government will be able to express disappointment at an intervention that overrides the interests of shareholders and the market. But it is unlikely that China will take retaliatory actionbecause this is still an isolated case involving a specific industry, not a trade war between nations.

However, the Italian government is also considering withdrawing from the memorandum of understanding on the Belt and Road Initiative (BRI), we remind the Anbound economist. «In 2019, in the face of the anti-globalization wave, Italy’s decision to join the BRI demonstrated independent judgment and willingness to engage in cooperation based on its national interests and market dynamics. The possible withdrawal is influenced by the geopolitical situation. It is evident that the “decoupling” from China pursued by the United States for its national interest has had a significant impact on the European allies who are now discussing “de-risking”. Italy will have to have a realistic and long-term perspective. Making decisions only based on the needs of geopolitics can miss opportunities at the time of global recovery. He Jun reminds us that «Germany and France (chosen in recent days by Prime Minister Li Qiang for his first international mission, ed) have maintained favorable trade relations with Beijing. And even the United States has not altered them much, despite the deterioration of geopolitical relations with the People’s Republic of China. It means that the market follows its own laws which must be respected». According to Anbound «Italy’s withdrawal from the Belt and Road Initiative would make it lose its uniqueness in future cooperation with China and that would be an unfortunate development.’

Data on trade show that since the memorandum on the Silk Road was signed, China has greatly increased its exports to Italy, from 31 billion euros in 2019 to 57 billion in 2022. Italian exports were 13 billion and has only risen to 16. The imbalance is considerable. «The balance of trade cannot be assessed in absolute terms. The structure of trade is determined by the composition of the economy of the countries, by the factors of industrial production, by work. Despite having the highest trade deficit in the world, the United States continue to have their primacy of influence… Italy, maintaining a strong economic and commercial relationship with China, could export more».