Italy’s Meloni vows to ‘relaunch’ cooperation with China

This content was published on July 28, 2024 - 18:30

4 minutes

By Giselda Vagnoni and Laurie Chen

ROME/BEIJING (Reuters) -Italian Prime Minister Giorgia Meloni vowed on Sunday to “relaunch” cooperation with China, signing a three-year action plan during her first official visit to Beijing since taking office.

Meloni, who has led a right-wing government since 2022, made the announcement during a meeting with Chinese Premier Li Qiang, as Rome seeks to improve trade ties with Beijing after it exited President Xi Jinping’s flagship Belt and Road infrastructure investment scheme last year.

The Italian leader said her five-day trip was a “demonstration of the will to begin a new phase, to relaunch our bilateral cooperation”. The action plan aims to experiment with new forms of cooperation, she added.

Later in the day Meloni said that an industrial cooperation memorandum signed by Italy and China includes strategic industrial sectors such as electric mobility and renewables.

Li Quiang pointed to “mutually beneficial cooperation between small and medium-sized enterprises in the fields of shipbuilding, aerospace, new energy, artificial intelligence,” in a statement released by his office.

Meloni, who sees Chinese investment as a way to spur Italy’s anaemic economic growth, will meet Xi and China’s top legislator, Zhao Leji, third in the leadership hierarchy.

On Sunday, Meloni also attended an Italy-China business forum, to which companies including Italian tyre-maker Pirelli, energy group ENI, defence group Leonardo, wine producers and several Italian luxury fashion groups such as Dolce & Gabbana were invited.

The forum gives “another signal of the mutual interest … (to) balance more our interests, our commercial exchange,” she said. Meloni is expected to raise Chinese overcapacity with Chinese officials, as well as Chinese economic support for Russia in its war with Ukraine.

“China and Italy should adopt a win-win mentality and increase trade and investment cooperation, making cooperation even more dynamic and sustainable,” said Li at the opening of the forum, according to a video shared by Meloni’s office.

‘CLARIFYING MISUNDERSTANDINGS’

In 2019, Italy became the only Group of Seven country to join the massive Belt and Road Initiative but withdrew last year under U.S. pressure over concerns about Beijing’s economic reach.

Meloni’s government said the deal had brought no benefits to Italy, whose trade with China – worth 66.8 billion euros ($80 billion) in 2023 – is heavily tilted in Beijing’s favour. China is Italy’s biggest non-EU trading partner after the U.S.

Chinese state media said the trip was aimed at “clarifying some misunderstandings” over Italy’s withdrawal from the Belt and Road and stressing the importance of economic ties.

The Italian government is holding talks with Chinese automakers as part of efforts to attract another major manufacturer to the country in addition to Stellantis.

Speaking at the Business Forum, Meloni said the industrial cooperation memorandum signed by Italy and China “includes strategic industrial sectors such as electric mobility and renewables” and called on Beijing to share “the new frontiers of knowledge with its partners”.

The protection of geographical indications, food safety, the environment and education were the focus of other framework agreements.

Italian foreign direct investment in China totals 15 billion euros ($16 billion), and more than 1,600 Italian companies are active, especially in textiles, mechanical engineering, pharmaceuticals, energy and heavy industries.

However, Italy supported the European Commission’s decision to impose provisional tariffs of up to 37.6% on electric vehicles imported from China. Beijing reacted angrily and has launched retaliatory investigations into European brandy and pork.

G7 members, including Italy, pledged last month to continue to protect their businesses from what they consider unfair Chinese trade practices.

(Reporting by Giselda Vagnoni in Rome and Laurie Chen in Beijing; Editing by William Mallard, Giles Elgood and David Evans)