Italy-China Bilateral Relations and Trade 2024
2024 was a significant year for bilateral relations between Italy and China, marked by two major anniversaries: the 20th anniversary of the Global Strategic Partnership and the 700th anniversary of Marco Polo's passing.
During the year, both nations renewed their commitment to establishing stable, long-term relationships by enhancing cooperation in the economy, trade, investment, and cultural sectors. Within this framework, Sistema Italia launched several initiatives focusing on art, culture, and music, organizing numerous events that also showcased Italian businesses through the 'Made in Italy' brand.
In July, during the official visit of Prime Minister Giorgia Meloni, a three-year economic cooperation action plan (2024-2027) was unveiled. This plan emphasizes emerging industries, particularly focusing on technological sectors where China holds significant competitive advantages. Both parties expressed their intention to consolidate relations in the following sectors: economic and commercial investments, finance, technological innovation and education, green and sustainable development, healthcare, and cultural exchanges. Prior to the Prime Minister’s visit in early July, a delegation led by the Minister for Enterprises and Made in Italy, Adolfo Urso, engaged in discussions about potential industrial partnerships in green technologies and electric mobility, with the goal to establish a central production platform in Italy to support the ecological transition. President Sergio Mattarella, accompanied by Foreign Minister Antonio Tajani, concluded the series of diplomatic meetings for 2024 during their visit to Beijing. Upon their arrival at the National People’s Congress Palace, President Mattarella was formally received by President Xi Jinping, where both leaders engaged in comprehensive discussions alongside their respective official delegations. At the end of the meeting, both presidents participated in the presentation of the Italy-China Cultural Forum results and signed agreements between the two nations.
Italy-China Trade Exchange 2024
According to data released by Istat, the trade exchange between Italy and China reached EUR 59.9 billion in the first eleven months of 2024, marking a 5.2 per cent decrease compared to the same period in 2023, primarily due to a 21.1 per cent reduction in Italian exports to China. From January to November 2024, Italy exported a total of EUR 14 billion to China, while imports from China reached EUR 45.9 billion. China continues to be a strategic destination for Italian exports, ranking among the top destinations globally, serving as the primary market in Asia and the second largest non-eurpean market after the United States.
The composition of Italian exports to China consists mainly of textiles and clothing, which account for 26.5 per cent of total exports to Beijing. This is followed by machinery and equipment (22.9 per cent), chemicals and chemical products (7.9 per cent), pharmaceuticals (6 per cent), and transportation equipment (6 per cent).
The increasing number and value of official missions to China, along with active participation in events and trade fairs from the Italian companies, have greatly boosted economic ties between Italy and China. Italy has invested over EUR 15 billion directly in China, while China has invested EUR 2.3 billion in Italy, and more than 1,300 manufacturing investments from Italian companies in China are creating around 130,000 jobs and generating EUR 33 billion in revenue. According to the Confindustria Study Center, the potential export growth that Italy can still achieve in the Chinese market is EUR 2.4 billion for consumer goods and EUR 2 billion for capital goods.
China Macroeconomic Scenario 2024
Based on data from the Chinese National Bureau of Statistics (NBS), China’s economy grew by 4.6 per cent year-on-year in the third quarter of 2024, a slight decrease from 4.7 per cent in the previous quarter. Over the first nine months of the year, GDP growth reached 4.8 per cent, totaling approximately USD 13.38 trillion, just below the government’s annual target of “around 5 per cent”. This slowdown is attributed to ongoing challenges such as the real estate sector crisis, weak domestic demand, and trade tensions with Western countries. The International Monetary Fund projects GDP growth of 4.8 per cent for 2024 and 4.5 per cent for 2025, with China likely maintaining a similar growth target for 2025, supported by various stimulus measures.
According to the NBS, China’s official Composite PMI for December, which includes both manufacturing and services activities, rose to 52.2 compared to 50.8 from the previous month. Additionally, retail sales increased by 3 per cent in November year-on-year, industrial production grew by 5.4 per cent during the same period—exceeding expectations—and fixed asset investments saw a 3.3 per cent rise, slightly below forecasts. The urban unemployment rate remained steady at 5 per cent in November, while consumer inflation fell to 0.2 per cent annually, reaching a five-month low.
Furthermore, China reiterated its goals of implementing new financial market regulations, dealing with youth unemployment, addressing the real estate market crisis, and boosting domestic consumption and foreign investments. The People’s Bank of China introduced several measures to stimulate the economy, including reducing short- and medium-term interest rates, supporting the stock market with a USD 71 billion fund, and intervening in the real estate sector. Specifically, the seven-day lending rate decreased from 1.7 to 1.5 per cent, and the fourteen-day rate dropped from 1.95 to 1.85 per cent. Moreover, the medium-term credit line rate was reduced from 2.3 to 2 per cent. In the real estate sector, existing mortgage rates were lowered by 50 basis points, and the down payment requirement for purchasing second homes was reduced from 25 to 15 per cent.