Italian and Chinese companies will hold B2B meetings today at the Italy-China Business Forum in Rome, after a meeting between Italy’s Foreign Minister Paolo Gentiloni and his Chinese counterpart Wang Yi. Italy’s Ambassador to China Ettore Sequi talks to Il Sole24 Ore-ItalyEurope24’s Rita Fatiguso about the new opportunities being created for Made in Italy exporters by China’s goal of shifting its economic model towards domestic consumption.
FATIGUSO: In your opinion, Ambassador Sequi, how does the Italian business community see Italy’s relationship with China today?
SEQUI: China is trying to move beyond a growth model based on low-cost investments and exports to adopt one of development focused on high-value-added production and domestic consumption.
This is an epoch-making transition, accompanied by an extraordinary expansion in the middle class. With an average of 250 million affluent citizens estimated in 2022, China will become the world's largest market for consumer goods. Already in 2015, with 109 million adult consumers, for the first time the Chinese middle class exceeded that of the United States.
This phase provides a unique opportunity for our entrepreneurial system, which does not lack the ability to adapt to the Chinese context, as I have the good fortune to observe every day . However, it is essential, in a country like this, for Italy to work together as a team, pooling resources and public-private sector expertise.
FATIGUSO: What particular problems do Italian companies or sectors doing business in China face? And which sectors in particular?
SEQUI: I would mention the system of corporate governance and some stiffness in the joint venture arrangements, the non-tariff barriers to market access, and intellectual property.
But we are also seeing important developments, both from a regulatory and judicial viewpoint, as demonstrated by recent successes in resolving legal disputes, reported by Italian companies.
FATIGUSO: What consequences do you see for our companies and, more generally, for foreign companies present in the country from China’s reforms ?
SEQUI: The Chinese government has launched an ambitious program of structural reforms summed up in the 13th five-year program (2016-2020). The ambition is to improve competitiveness, to reduce production overcapacity and to support the growth of emerging industries.
This opens space for the technological capabilities of Italian companies. There are already many successes: the helicopters sold by Agusta Westland, the supplying of the gearboxes by SCM to equip the CRH5 Chinese bullet train, the order won by Petroltecnica for the reclamation of highly polluted areas, the production excellence in packaging and food safety by the Goglio Group. The Chinese market recognizes the value of Italian products, but our objective is for further growth. “Made in Italy” may be the answer to new needs.
FATIGUSO: The Italy-China Business Forum being held today in Rome was created as a tool to facilitate business opportunities, especially for SMEs. What can be done to promote it?
SEQUI: The Business Forum (BF) is a platform that should enable companies from the two countries to better know each other and to take advantage of collaboration opportunities. The next meeting today in Rome is an important chance to give impetus to this tool, and the appointment of Pirelli CEO Marco Tronchetti-Provera to head the Italian side is a strong sign of the Italian commitment.
FATIGUSO: Last September the Embassy brought together Italian businesses in China for an informal networking event at Yanqui Lake. Could this become a permanent working method?
SEQUI: The meeting with Italians entrepreneurs in China, promoted by the Embassy last September, has been a real success. We got together over a weekend outside of Beijing to meeting informally, but above all to do some teambuilding. The outcome was some good ideas and some new partnerships. We therefore decided to make the event a permanent one, and we are getting ready for the second edition. In the same spirit, I have worked to strengthen relations between the Italian institutions in China since my arrival as ambassador. The diplomatic network -- the embassy, consulates and the Italian Trade Agency -- now has a strategic coordination board, which meets in a videoconference, to discuss projects that can better support our business, ensuring a high and consistent level of services.
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