Italy sees major business opportunities from China in areas such as industrial machinery and green energy, and the country needs Chinese electric vehicle (EV) investments to boost its auto industry, according to an Italian business figure.
China is Italy's largest trading partner in Asia and the biggest non-EU trading partner after the United States, while Italy is China's fourth-largest trading partner in the European Union (EU). Italian Prime Minister Giorgia Meloni began her five-day visit to China on Saturday, aiming to strengthen trade relations between the two countries.
In an interview with China Global Television Network (CGTN) on Wednesday, Vincenzo Raffa, vice president of the Italy-China Association of Business, shared his thoughts on potential areas for bilateral trade cooperation between the two countries. For example, he noted cooperation on industry machinery, which has been a leading export from China to Italy in recent years.
"First of all, the agricultural sector, also the pharmaceutical (sector). Because China keeps on asking for higher healthcare needs in China, and Italy can address this kind of needs. Also (industries related to) aging population both in Italy and China are really key industries. Of course, we are also talking about luxury goods, industry machinery and advanced manufacturing. Industry machinery is the number one export from China to Italy in the past years and still is. And, of course, green technology, where China is a leader for the past years and renewable energy where Europe and Italy are focusing on," said Raffa.
Despite the EU's unjustified high tariffs on Chinese EVs, Raffa said that Italy, as an EU member, actually welcomes Chinese manufacturers setting up EV production in the country to support its auto market, according to the Italian business insider.
"From one side, Europe is sending a blockage message. From the other side, Italy is saying it's okay. We are in the middle of the Mediterranean; Chinese investors can have access to the Italian market which is at the center of logistics for the entirety of Europe and Africa, so we can be partners. From the other side, the Italians are looking for a place to invest, so there are mixed messages at the moment. What we can see from an economic point of view is that actually, although there are some tariffs on auto exports from China, the concrete messages are actually opposite. The Italian government is looking for a second investor after Le Motor in Italy to produce cars in Italy, so this is actually what Europe wants. Europe wants Chinese companies to set their production in Europe and start producing in Europe to help the European market grow. So one is a political message, one is an economic message," said Raffa.
In recent months, China's visa-free policy for nationals of more countries has signaled greater openness, which is expected to attract more overseas investors, according to Raffa.
"For sure, the visa-free policy is more than welcome. For new investors or for people who want to access this incredibly flexible market, it is a good thing. I would not say that this is really shifting the foreign direct investment arena in the future or in the present. But, for sure, this portrays China as taking a more open step towards better treating foreign direct investment," he said.
Italian business figure highlights cooperation with China on industrial machinery, EV
A 25 percent import tariff on all foreign-built vehicles entering the United States has raised serious concerns for manufacturers in South Africa.
Automotive giants like Mercedes and BMW have long used South Africa as a base for global exports -- but those plans may be shifting into reverse gear after the U.S. announced the punitive measures.
"If you take, for example, BMW, 97 percent of the X3 that we are producing in Rosslyn is exported out of the country. We only sell 3 percent in South Africa, and there's a huge number of those vehicles that also go into the U.S. So there are companies in South Africa that are purely here not because they are selling vehicles in South Africa; they are here to produce vehicles for the global market, and it's important for them to remain globally competitive," said Mike Mabasa, CEO of the National Association of Automobile Manufacturers of South Africa.
U.S. automaker Ford, which has deep roots in South Africa, is also in the crosshairs.
The company recently invested over 300 million U.S. dollars to upgrade its Silverton plant in Pretoria, South Africa, for the production of the world's only plug-in hybrid Ranger, which has just entered production but could face delays or restrictions.
"If an American citizen wants to buy specifically a Ford Ranger that is a plug-in hybrid, they can only place an order in South Africa, nowhere else in the world. So, that means, obviously, the capacity of Ford to be able to produce those vehicles in big volumes is going to be constrained, because Americans are going be looking at another Ford that is produced in another country, or even in the United States," said Mabasa.
South Africa has long enjoyed duty-free automotive exports to the U.S. under the African Growth and Opportunity Act, but that relationship now hangs in the balance.
A sharp shift in U.S. foreign policy threatens to derail an industry that employs thousands and contributes around 5 percent to the country's economy.
"We produce less than 1 percent of global automotive vehicles, so to say. So, in reality, the impact on us is likely to be more disproportionate than those of our peers that produce at the same level. And the risk is actually created -- a concentration risk -- in countries that have greater capacity and are building more; in those countries will be able to absorb some of this," said Parks Tau, South Africa's minister of trade and industry.
Amid growing concerns about overreliance on the U.S. market, Amith Singh, national manager for manufacturing at Nedbank Commercial Bank, emphasized the importance of tapping into regional trade opportunities.
"I think we need to make better use of some of our local agreements, our African continental agreements. How do we leverage that? How do we partner with the government and private sector to start benefiting the countries and the economies aside from the United States? So, those could be the catalyst to drive our localization projects; it could be what we need to drive the African economy as opposed to being completely reliant on the States (United States)," he said.
South Africa is for now standing firm in its decision not to retaliate against steep U.S. import tariffs, set to take effect in just a few days.
Officials in Pretoria acknowledge the challenges posed by the current U.S. administration but are pursuing a diplomatic approach in hopes of maintaining stable relations and preserving the African Growth and Opportunity Act.
US tariffs rock South Africa’s auto industry
