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CWA # 1395, 30 July 2024
NIAS Europe Studies
Meloni and Xi sign a three-year Action Plan: Five Focus Areas of China-Italy Collaboration

  Samruddhi Pathak

By Samruddhi Pathak

On 28 July, Georgia Meloni, Italy’s Prime Minister, as part of her five day visit to People’s Republic of China, held discussions with Xi Jinping, President on future Italy-China cooperation. Italy which had shown interest in collaborating with China on economic projects, was the first to collaborate on the Belt and Road Initiative project in the EU. However, the bilateral ties watered down when Italy withdrew due to concerns over the Chinese threat to the world order and trade. During this visit, the two leaders signed a three year cooperation strategy that covers areas related to upcoming technology and economic cooperation. Apart from the scope of bilateral relations, they also discussed the crisis in West Asia and the Russia-Ukraine war. 

What is the Action Plan to 2024-2027 Partnership about?
The 18 page document signed by the two leaders discusses cooperation on economic tariffs, market access, green finance, cultural programs, technology sharing and ease of doing business.
 
The focus was on the following five areas;

1. Economic collaboration was a priority in Meloni’s visit to China.
The two countries plan to strengthen the role of the Joint Economic Commission. The aim of this Commission is to enhance complementary roles of Italy and China in the Italy-China Business Forum. Chinese investments in Italy and one-third of Italian investments in China. Meloni, while addressing the Joint Forum during her visit, said that they need to bridge this gap. Italy has also promised to support the China Council for the Promotion of International Trade, vice versa, China has promised to support the Italy Chamber of Commerce. 

2. Making the market accessible
The two agreed to make their markets accessible to the others’ economic operators and eliminate non-tariff barriers that impede trade. These barriers can be eradicated by strengthening the role of the Investment Collaboration Working Group. Both leaders also plan to collaborate on improving the capabilities of medium and small-scale enterprises.

3. Boosting economic infrastructure through sustainable finance
One of the traditional ways to improve economic infrastructure is through international and multilateral banks. Thus, the countries recognise the importance to Asian Infrastructure Investment Bank, BRICS and other multilateral banks in easing bilateral trade. With sustainability taking centre stage in the 21st century, green finance has been a pivotal area in Italy-China three year cooperation plan. The two countries will work to propose a Sustainable Finance Roadmap to prioritise climate change in their cooperation. The bilateral collaboration might also have greater cooperation with G20 projects since, in 2021, when Italy was holding the presidency in G20, it signed and established a G20 Sustainable Finance Roadmap as well. Thus, the two countries can also bring their bilateral projects to a multilateral platform. 

4. Focus on cooperation over technology and pharma
With the rise of fintech companies and e-commerce trade, technology cooperation has become pertinent for ease of doing business. The partnership agreement meticulously discusses an Executive Program between the Ministry of Foreign Affairs, China and Ministry of Science and Technology, China and their counterparts in Italy. The two countries have proposed a Joint Declaration for Science and Technology. Both countries will also work towards regulatory collaboration on medicine, medical devices and cosmetics. Since the Chinese cosmetic industry is huge and provides cosmetic products at an economic cost, meanwhile, it faces regulatory obstruction from the EU over quality issues. Similar issues are faced by the Chinese pharmaceutical businesses. Thus, the two countries can eliminate factors impeding their pharmaceutical and cosmetic trade. 

5. Initiating peaceful research in the polar
Another vital area of cooperation is the Polar sphere. Since both countries have their research stations in the Ross Sea area, Antarctica, peaceful research cooperation will be initiated between Mario Zucchelli Research Station and Qin Ling Research Station in the Polar region. The countries aim to research climate change and its impact on the Polar region. Similarly, initiatives have been launched in space cooperation as well. A Memorandum of Understanding will be signed between Italy and China on electromagnetic monitoring of the CSES-02 satellite to launch in 2024 and cooperation on the Tain Wen 2 asteroid exploration mission. Both countries are also launching the China-Italy University Rectors Forum in China. The forum aims to train high-level technicians to work in technology-intensive industries. 

What does this mean for Italy?
The primary aim of this agreement is to balance the bilateral trade which is currently tilted towards China’s favour. China is a manufacturing giant that produces economic products. Italy will need to collaborate to make use of this advantage. Meanwhile, it will also need to ensure that Chinese products maintain European standards in the quality of their product.
Italy voted in favour of the EU when it decided to impose 37.6 per cent tariffs on Chinese EVs. The EU has, multiple times, accused China of ‘dumping cheap EVs’ in the EU. Similar situations arise in the pharmaceutical industry of China. Thus, the reduction of red tape is important for bilateral business to flourish. This cannot be achieved without including the EU in discussions. Thus, stakeholders in the Italy-China bilateral affairs are more than just two state actors.
 
References
“Piano d’azione per il rafforzamento del Partenariato Strategico Globale Cina-Italia (2024-2027),” Italian Government, 29 July 2024)
“Italy’s Meloni vows to ‘relaunch’ relations with China,” Politico, 29 July 2024)
“Meeting in Beijing, China's Xi and Italy's Meloni discuss conflicts,” Reuters, 29 July 2024)
“President Meloni’s address at the Italy-China Business Forum,” Italian Government, 28 July 2024)
“G20 Sustainable Finance Roadmap,” G20 Italian 2021, 7 October 2021)

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