The Italian government established diplomatic relations with the People’s Republic of China (PRC) in 1970. One year later, Italy also voted in favour of admitting the PRC to the United Nations. Despite this official recognition, the commercial relationship between the two countries did not immediately improve, and the political relationship continued to experience ups and downs, determined both by internal, European, as well as global developments. Nevertheless, Italy was one of the first countries to ease the tensions with China after the Tiananmen crackdown of 1989. The late 1990s and early 2000s saw moments of rapprochement and moments of distancing, but overall, Italian governments have maintained a rather positive view and approach towards China.
However, as China opened up its economy and became a global manufacturing hub, Italy as a country whose industrial base heavily relies on manufacturing, and most importantly on the textile sector, began feeling the pinch of intense competition. Despite Italy supporting China’s entry into the World Trade Organisation (WTO) in 2001, later on, at the European Union (EU) level, the country strongly opposed the designation of China as a market economy and was among the proponents, together with France and Germany, of a proposal to adopt stricter measures to manage company takeovers in the EU, a measure that indirectly targeted Chinese enterprises. In 2019, two years after Italy, France, and Germany sent the above-mentioned proposal to the European Commission, the EU adopted a framework for investment that allows member states and the European Commission to share information and opinions regarding inbound foreign direct investments. Italy, which in the meantime has undergone a transition from a government led by a mainstream centre-left party to a populist coalition, abstained at the final vote. That very month, March 2019, Italy signed a Memorandum of Understanding (MoU) with China in the framework of the Belt and Road Initiative (BRI), thus becoming the first G7 country to officially endorse and become part of the Initiative.
Despite another change of government in September 2019 (when a coalition between a populist party and centre-left mainstream parties came to power), Italy’s positive approach towards China has not changed. On the contrary, the supposedly new closeness between the two countries was used by the Minister of Foreign Affairs of that time, Luigi Di Maio, to explain the prompt and generous arrival of aid and medical supplies from China at the beginning of the outbreak of the COVID-19 pandemic in Italy. Furthermore, 2020 was meant to be the year in which the two countries would have celebrated the 50th anniversary of their diplomatic relations as well as the year of Italy-China tourism (now postponed to 2022). Despite the impossibility of celebrating these two occasions, throughout a difficult year such as 2020, Italian and Chinese counterparts continued to sign and finalise agreements that went beyond those initially agreed upon in March 2019 during the signing of the MoU. In December 2020, Luigi Di Maio and his Chinese counterpart Wang Yi reaffirmed both sides’ commitment to the BRI MoU.
On 22 March 2019, Italy joined the BRI on the occasion of a state visit by President Xi Jinping. 29 agreements were signed, 10 institutional and 19 commercial. Among the most significant agreements arguably are those between:
– The Port Authority of the Eastern Adriatic Sea and China Communications Construction Company (CCCC): The planned collaboration foresaw the involvement of the state-owned CCCC in the construction of an intermodal rail station near Trieste, but no progress has been made since 2019. Furthermore, two elements suggest that further developments in this project are very unlikely: a) the station of Servola (where the intermodal rail station was to be built) does not have enough space for such a development; and b) the arrival of the German Hamburger Hafen und Logistik AG (Hhla) as majority shareholder in the construction of the new intermodal port terminal suggests that Trieste has been looking elsewhere for investments. For more details, see the Port of Trieste Rail Intermodal Platform profile.
– The Western Liguria Sea Port Authority and CCCC: The two parties agreed to collaborate on the construction of a new breakwater dam near Genoa, but the planned cooperation did not materialise. CCCC participated in a public bid for the construction of the project but did not win it.
– The Italian Trade and Investment Agency and Suning.com Group Co. Ltd.: This collaboration officially began in July 2019. The objective is to increase the purchase of Italian products, including from less known brands, by Suning.com to ultimately distribute and sell in China.
– The Italian Ministry of Culture and China’s Ministry of Culture and Tourism: According to this agreement, Italy would return 796 archaeological pieces belonging to China’s cultural heritage. The restitution took place in the same month of the signing of the MoU, March 2019.
– China Seismic-Electromagnetic Satellite 02 (CSES-02): According to this agreement, the China National Space Administration (CNSA) and the Italian Space Agency (ISA) will build a satellite that will ‘monitor electromagnetic field and waves, plasma and particle perturbations of the atmosphere, ionosphere and magnetosphere induced by natural sources and anthropocentric emitters and to study their correlations with the occurrence of seismic events’. The CSES-01 was launched in orbit in 2018 and the agreement signed in 2019 was for its replacement to go in orbit in March 2022. As of February 2021, the satellite’s construction is at an advanced stage.
– The Italian news agency Ansa and Xinhua: Ansa now publishes translated news from Xinhua, labelling them as Xinhua news. Since the signing of the agreement, Ansa’s China coverage has expanded significantly, with the majority of the content coming from Xinhua.
– National broadcaster RAI and China Media Group: The agreement envisioned broad terms for collaboration between the two. However, for the moment, there have not been significant developments.
At the end of 2020, the two countries’ Ministers of Foreign Affairs Di Maio and Wang Yi reaffirmed their reciprocal commitment to the agreements, the MoU, and the BRI. This included a direct mention of the partnership on CSES-02, but not of a controversial proposal to have the Italian industry build habitational modules for the Chinese space station Tiangong-3. This collaboration has been under discussion since 2018 but was not included in the batch of MoUs signed on the occasion of Xi Jinping’s 2019 visit. The initiative was then abandoned by the Italian counterpart soon after March 2019.
Bilateral Trade: In 2019, Italian exports to China amounted to more than 15 billion USD, while imports from China were worth more than 38 billion USD. Imports have been increasing, while exports have been decreasing. In terms of sectors, computers and electronics are at the top of the products imported from China, followed by machinery and appliances. The manufacturing sector remains the core of Italy’s exports to China, with machinery and appliances being the top products, followed by pharmaceutical products and clothing. Although not among these top sectors, the automotive, food, and wine industries remain important for Italy’s export to China.
Investment: Italian investment in China has been growing. In 2019, the number of Chinese enterprises controlled by an Italian enterprise had registered an 8.4% increase compared to the previous year. Chinese investment in Italy has been steadily growing since the 2010s, mostly in manufacturing, followed at a distance by services. Within the manufacturing sector, machinery and appliances attract the most investment, followed by plastic and rubber products (the latter in connection to the automotive sector). In terms of territorial distribution, most Chinese investments are in the north of the country, especially in Lombardy and, in particular, in the city of Milan.
There have been multiple layers of controversy related to Italy’s decision to sign the BRI MoU. The most general of these layers regards the very decision to sign the agreement. The decision of the Italian government to sign the MoU raised concerns within the European Union and in the United States. Italy being the first G7 country to sign such an agreement was viewed by Brussels and Washington as a great political and diplomatic concession to China and a sign of China’s growing influence in Europe.
Other controversies were about specific parts of the agreement, mostly those that concerned space and ports. One of the controversies that followed Xi’s state visit to Italy, but was not part of the MoUs signed on that occasion, was a potential collaboration between Italian industry actors and China’s National Space Administration regarding the Tiangong-3 space station mentioned above. This collaboration was scrapped soon after signing due to security concerns raised from the United States.
The other controversies concerned the agreements with the two port authorities, that of the Western Liguria Sea (Genoa) and that of the Western Adriatic Sea (Trieste). After the experience of the Port of Piraeus in Greece—where COSCO’s acquisition of majority shares of the port led to disputes over labour conditions, environmental protection, public health, and the use of land—and awareness of the increasing involvement of Chinese enterprises in other European ports, concerns were raised, mostly by US officials, regarding CCCC’s involvement in infrastructure projects in both ports. The main worry was that China would eventually come to buy these ports and, thus, that Italy’s and Europe’s dependence on China would increase. However, in Italy, ports are publicly owned and cannot be sold.
Agenzia Nazionale Stampa Associata (ANSA) the leading wire service in Italy, is also available in English.
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Cover Photo: Italy from space, by NASA Views Earth at Night (CC).