Will Leonardo and Fincantieri celebrate for Meloni and Tajani’s chinoiserie?
Tajani's trip to Beijing is all about reassuring China that exiting the Silk Road will not mean giving up political ties. But on trade, the Farnesina snorts: too much imbalance in trade. Here are the sectors targeted by the Meloni government to push exports
Will Leonardo and Fincantieri be some of the major Italian companies that will celebrate Italy's new course with China?
According to the correspondent of Il Mattino (a newspaper of the Caltagirone Group which also owns Il Messaggero ) in China, following the Foreign Minister Antonio Tajani, behind the decision of the Italian government to leave the New Silk Road "there are arithmetic reasons, even before what policies".
Political, however, was the nature of the memorandum of understanding on the Belt and Road Initiative, the official name of the so-called New Silk Road, signed in 2019 by the Conte I government which brought Italy – the only case among the G7 countries – to the 'inside Beijing's large infrastructural-geopolitical, even before economic-commercial, project.
The memorandum will expire in 2024 and will be renewed automatically, unless the government of Giorgia Meloni decides to abandon it: abandoning it is exactly what it would like to do , although the methods are not clear.
In Beijing, Tajani wanted to reassure the Communist Party that leaving the Belt and Road Initiative will not lead to a cut in diplomatic ties and will not represent an attack on China. Such concern can be explained by the desire not to compromise political and consequently economic relations.
THE ITALY-CHINA TRADE BALANCE MAKES THE FARNESINA PUFF
However, the article in the Mattino reports that, "according to the Italian feluccas", i.e. the officials of the Farnesina, the balance of trade between Italy and China "is too unbalanced between imports and exports" to Beijing's advantage. In the last three years, Italy's trade deficit has worsened, going from 19.4 billion euros to about 41 billion. Furthermore, the large European countries that have not joined the New Silk Road have export volumes to China higher than those of Italy: in 2022, our exports to the Chinese market were worth 16.5 billion, while the French one amounted to 23 billion and the German one at 107 billion. It is proof that the memorandum did not represent a commercial agreement, but a political one.
The Meloni government, writes the newspaper, is aiming for "greater reciprocity" in the Rome-Beijing exchange. To increase exports, the executive will stimulate some fundamental sectors, such as fashion (exports for 80 billion out of the 620 total in 2022), and in particular the luxury segment.
LEONARDO'S AEROSPACE AND CHINESE BUSINESS
Then there is aerospace: at the 2022 G20 in Bali, an agreement was reached for the sale to China of two hundred and fifty ATR aircraft, the equal joint venture between the Italian Leonardo and the French Airbus, built in Pomigliano d'Arco ; these are 42-600 model aircraft intended for passenger transport (civil aviation, therefore).
As reported by Start Magazine , Leonardo has sold over two hundred helicopters to various Chinese entities for commercial transport, rescue and public safety functions. The company – in which the Ministry of Economy owns 30 percent – is also collaborating with the Chinese aerospace company COMAC on the construction of CR929 aircraft (an originally Sino-Russian project).
SHIPBUILDING AND FINCANTIERI
After aerospace there is shipbuilding. In 2020 Fincantieri – controlled by Cassa depositi e prestiti, therefore by the Ministry of the Economy – began to collaborate in the construction of the first Chinese cruise ship for the domestic market. In association with the conglomerate China State Shipbuilding Corporation, it was responsible for the licensed provision of the "technology platform and a number of technical services, including project management activities, supply chain management and sales of key systems and components". Furthermore, Marine Interiors, a subsidiary of Fincantieri, had obtained a contract for the supply of 2,800 cabins.
CHIPS AND PHARMACEUTICALS
Another relevant sector, considering its centrality for industry, but sensitive in the specific case of advanced technologies, is that of semiconductors. The Italian-French company STMicroelectronics – also owned by the Ministry of Economy – announced in June a project with Sanan Optoelectronics for the formation of a joint venture in China dedicated to silicon carbide devices for electric vehicles, systems energy and industrial plants. The estimated value of the joint venture is $3.2 billion.
Finally, the pharmaceutical sector was the protagonist of a strong growth in exports to China – 131 percent more on an annual basis, as reported by Il Mattino – due to Paxlovid, an antiviral drug against COVID-19 produced at the Pfizer plant in Ascoli Piceno.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/governo-meloni-rilancio-export-italia-cina/ on Tue, 05 Sep 2023 14:05:46 +0000.