Italy, China announce 3-year industrial cooperation plan as EU-China trade war fears loom

• Italian Prime Minister Giorgia Meloni visited Beijing and announced that Italy and China had signed a three-year action plan to implement past agreements and experiment with new forms of cooperation.
• Meloni is seeking to improve relations between the two countries after withdrawing from China’s Belt and Road Initiative amid growing fears of a trade war between China and the EU.
• The three-year industrial cooperation memorandum aims to strengthen cooperation in the fields of electric vehicles and renewable energy.

Italy and China signed a three-year action plan on Sunday to implement past agreements and experiment with new forms of cooperation, Italian Prime Minister Giorgia Meloni said during an official visit to the Chinese capital.

Meloni is trying to reset ties with China amid a mix of fears of a trade war with the European Union and continued interest in attracting Chinese investment in auto manufacturing and other sectors.

“Certainly there is much work to be done, but I am convinced that this work will be beneficial in such a complex context at the global level and is also important at the multilateral level,” she said in opening remarks at a meeting with Chinese Premier Li Qiang.

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Her five-day visit comes months after Italy withdrew from China’s Belt and Road Initiative, a signature policy of Chinese President Xi Jinping to build power and transport infrastructure around the world to stimulate global trade and deepen China’s ties with other countries.

Still, Italy is keen to pursue stronger economic ties with China. Stellantis, Italy’s largest automaker, which includes Fiat, said in May it was forming a joint venture with Chinese electric vehicle startup Leap Motor to start selling electric vehicles in Europe.

After his meeting with Meloni, Premier Li told Italian and Chinese business leaders that China’s efforts to upgrade its economy will increase demand for quality products and provide greater opportunities for cooperation between companies from the two countries.

Responding to a common complaint from companies operating in the world’s second-largest economy, the prime minister promised to further open up the Chinese market, ensure foreign companies receive equal treatment to their Chinese counterparts and create a transparent and predictable business environment.

“At the same time, we hope the Italian side will work with China to provide a more fair, just and non-discriminatory business environment for Chinese enterprises doing business in Italy,” he said.

Meloni told business leaders that the two countries had signed memorandums of understanding on industrial cooperation including on electric vehicles and renewable energy, describing these as “areas where China has been operating at the cutting edge of technology for some time already and sharing new knowledge frontiers with its partners.”

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Electric vehicles have also become a symbol of growing trade tensions between China and the EU, which in early July imposed temporary tariffs of up to 37.6% on Chinese-made electric vehicles. The two countries are in talks to resolve the issue before an early November deadline.

Meanwhile, China launched an anti-dumping investigation into European pork exports just days after the EU announced it would impose tariffs on Chinese-made EVs.

Meloni, who arrived in Beijing on Saturday, is his first visit to China as prime minister. He has met Li before, in New Delhi last September during the G20 summit of the world’s 20 largest economies.

Italy’s decision to join the Belt and Road Initiative in 2019 was seen as a political coup by China, marking its expansion into Western Europe and a symbolic boost in its then-escalating trade war with the U.S. But Italy argues that promised economic benefits never materialized and that joining created friction with other Western governments and the U.S.