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How China proliferates in Italy: new auto and green deals

Rome is currently negotiating with Dongfeng to build an automobile manufacturing facility. These recent agreements with companies in the PRC have the objective of advancing photovoltaic technology and promoting green initiatives. This demonstrates the strong economic ties and cooperation between the two countries after the end of the Belt and Road Initiative memorandum

Auto plant deal. Today, Reuters reported that talks between the Italian government and Chinese car manufacturer Dongfeng Motor Group about building an auto plant in Italy are in an advanced stage.

  • This is a significant development in the efforts to attract another major automaker to the country, in addition to Stellantis.
  • The Italian government is considering taking a minority stake in the investment to establish a European hub for Dongfeng. This deal could also attract key investors from Italy’s components sector.
  • Led by Prime Minister Giorgia Meloni, the Italian government is determined to increase domestic auto production to 1.3 million vehicles per year by 2023, up from below 800,000 currently. Discussions with Stellantis are ongoing, and the company aims to increase its Italian output to one million units by the end of the decade.

Eco power moves. This potential partnership with Dongfeng is the most recent in a series of strategic agreements between Italy and China, which are aimed at strengthening economic ties after Italy’s withdrawal from the memorandum of understanding on the Belt and Road Initiative.

  • Yesterday, a Memorandum of Understanding (MoU) was signed between the Ministry of Enterprises and Made in Italy (Mimit) and FuturaSun, an Italian group specialising in high-efficiency photovoltaic cells and modules. 
    • The agreement aims to investigate investment opportunities in Italy for producing solar cells and panels to be distributed globally. This collaboration aims to establish an Italian supply chain in green technologies.

This MoU follows… two other significant agreements signed after Meloni’s visit to China at the end of July.

  • One of these agreements was between Italy’s Bee Solar and China’s Huasun, aiming to initiate cooperation in the photovoltaic industry.
  • The partnership includes plans to establish a production centre in Italy, leveraging Huasun’s technology and expertise to create an advanced and competitive facility in Europe. This initiative aims to develop the photovoltaic supply chain in Italy, supporting the broader goal of enhancing green technologies.
  • Another notable agreement was between EuroGroup Laminations S.p.A. and Hixih Rubber Industry Group, with a focus on the automotive sector. 
    • The partnership aims to establish a joint venture to drive growth in the Chinese market and increase commercial penetration, particularly with Chinese electric car manufacturers. It also includes plans to create a research and development centre in Shandong, China, to support co-development activities and protect intellectual property.

Renewed trade vision. These agreements are part of a broader strategy to strengthen economic relations between Italy and China, with a focus on technological and industrial cooperation.

  • Prime Minister Meloni’s recent mission to China highlights the significance of re-establishing trade ties with the world’s second-largest economy. Through promoting collaboration in green technology, automotive, and photovoltaic industries, the Italian government aims to establish Italy as a crucial player in Europe while also benefiting from Chinese technological advancements and investments.
  • Meanwhile, as we previously reported, the sale of vital Italian assets, such as Stellantis’ Comau to an American fund and TIM’s network to KKR, has drawn closer attention.

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