Italy shuns doubt to reach out to China

Global Times - - Front Page - By Fabio Mas­simo Par­enti The au­thor is as­so­ciate pro­fes­sor of in­ter­na­tional stud­ies at the In­ter­na­tional In­sti­tute Lorenzo de’ Medici, Florence, mem­ber of CCERRI think tank, Zhengzhou, and mem­ber of EURISPES, Lab­o­ra­to­rio BRICS, Rome. His lat­est book is Ge

For many years, the Ital­ian po­lit­i­cal ap­proach to China was open, but skep­ti­cal, of­ten am­bigu­ous. To­day it is rad­i­cally chang­ing. Let me sum­ma­rize the main points of this pos­si­ble tran­si­tion. Italy did not rec­og­nize Mar­ket Econ­omy Sta­tus to China in 2016 and was in the fore­front of EU’s in­creas­ing crit­i­cism and skep­ti­cism re­lated to the growth of China’s over­seas in­vest­ments, sup­port­ing the need to de­fine an EU reg­u­la­tion for scru­ti­niz­ing the in­vest­ments. None­the­less, Italy al­ways rec­og­nized the im­por­tance of Chi­nese de­vel­op­ment and showed huge in­ter­est in BRI.

In the last few years, Italy be­came one of the main des­ti­na­tions of Chi­nese in­vest­ment in Europe. For ex­am­ple, Cassa De­positi e Prestiti (CDP), the Ital­ian de­vel­op­ment bank, has al­ready built suc­cess­ful syn­er­gies with China. In 2014, State Grid of China bought 35 per­cent of CDP RETI, which con­trols the main Ital­ian cor­po­rates (Terna and Snam) in the en­ergy trans­mis­sion sec­tor. In the same year, Shang­hai Elec­tric Cor­po­ra­tion and An­saldo En­er­gia signed two joint ven­ture agree­ments. In 2017, on the oc­ca­sion of the visit of an Ital­ian gov­ern­ment del­e­ga­tion to Bei­jing, CDP and China De­vel­op­ment Bank agreed to create a new €100 mil­lion in­stru­ment that will in­vest in the cap­i­tal of Ital­ian and Chi­nese small and medium-size com­pa­nies. These are just a few im­por­tant ex­am­ples of Chi­nese in­vest­ment dy­namism in the last few years. Not all the deals were con­sid­ered eco­nom­i­cally sus­tain­able, but on the whole Italy has gained from Chi­nese cap­i­tal flows.

The prob­lem is that, un­til few months ago, the coun­try did not draw a plan or a con­sis­tent strat­egy. This is the main rea­son why Michele Geraci, the new un­der­sec­re­tary at the Min­istry of Eco­nomic De­vel­op­ment with vast knowl­edge about China and the in­ter­na­tional econ­omy, re­cently said, “We are very dif­fer­ent from the pre­vi­ous gov­ern­ment on China, and we are try­ing not to ig­nore China as has been done in the past”. The point is the lack of a sys­tem­atic, long-term coun­try strat­egy for China. It is not pos­si­ble to reap the max­i­mum ben­e­fit if there is no con­stant in­sti­tu­tional work to deal with the po­ten­tial of the BRI, to ne­go­ti­ate in­vest­ment and trade agree­ments with­out defin­ing na­tional pri­or­i­ties and so on. For ex­am­ple, the cur­rent gov­ern­ment will be set back by new EU at­tempts to scru­ti­nize the in­vest­ment from China, after years of crit­i­cism to­ward im­por­tant Chi­nese ac­qui­si­tions of Euro­pean as­sets. The gov­ern­ment be­lieves that we could get more ben­e­fits from a sys­temic-coun­try ap­proach to China and its in­ter­na­tional projects. Our ex­ports to China are grow­ing, also be­cause Chi­nese im­ports are in a pos­i­tive ter­ri­tory that will last longer. We should sign agree­ments to fur­ther pen­e­trate China’s ex­pand­ing con­sump­tion mar­kets.

France, Ger­many and UK pro­gressed well in the last 20 years, but Italy fell back. We could do much bet­ter. In­deed, the new gov­ern­ment is mov­ing fast. In a few weeks, we had many high-level of­fi­cial vis­its and the lead­ers of the new Ital­ian gov­ern­ment are both on the same page on the na­tional strate­gic in­ter­est in China. Italy has the right and the po­ten­tial to bet­ter ex­ploit its ge­o­graph­i­cal lo­ca­tion in the BRI and of­fer many chan­nels of co­op­er­a­tion.

For these rea­sons, the Ital­ian Min­istry of Eco­nomic De­vel­op­ment es­tab­lished a task force on China with rep­re­sen­ta­tives of eco­nomic, cul­tural, fi­nan­cial and po­lit­i­cal na­tional com­mu­ni­ties of both coun­tries. The aim is to in­ves­ti­gate each eco­nomic sec­tor and each bi­lat­eral co­op­er­a­tion is­sue in or­der to move as a sys­tem. It con­sid­ers the mul­ti­ple ben­e­fits that ac­crue from strength­en­ing China-Italy re­la­tions: in­vest­ment, trade, pub­lic fi­nance, em­ploy­ment, tech­no­log­i­cal ad­vance­ment, eco­log­i­cal co­op­er­a­tion, in­ter­na­tional de­vel­op­ment etc. Sum­ma­riz­ing the main goals of the task force China, the Ital­ian gov­ern­ment will fo­cus on six key points: 1) pro­mot­ing the en­try of strate­gic cap­i­tal and di­rect green­field in­vest­ments in Italy; 2) fa­vor­ing Chi­nese in­vest­ments in gov­ern­ment bonds and pri­vate com­pa­nies; 3) pro­mot­ing Ital­ian ex­ports to China and Chi­nese tourism in Italy; 4) as­sist­ing Ital­ian com­pa­nies in the agro-food sec­tor; 5) fa­cil­i­tat­ing the ex­pan­sion of the green econ­omy in China and Italy; 5) help­ing Ital­ian com­pa­nies to con­nect with Chi­nese in­vest­ment pro­grams fi­nanced by the Belt and Road Ini­tia­tive; 6) en­hanc­ing mech­a­nisms of sci­en­tific col­lab­o­ra­tion and R&D.

It is not a case that dur­ing the last vis­its, Italy con­firmed the in­ten­tion to co­op­er­ate with China in third coun­tries, such as those of the African con­ti­nent. In this re­spect, an MoU signed dur­ing the last visit is al­ready an im­por­tant out­come. More­over, at the end of the year an­other MoU will be signed to fully in­volve Italy in BRI so that it could be­come China’s main part­ner in Europe. We need to adapt to our chang­ing world in a con­struc­tive way.

Il­lus­tra­tion: Liu Rui/GT

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