"Reality Check": Bilateral Economic Relations between Italy and China from the 1970s to the "New Silk Roads"

Abstract

On the occasion of the 50^th anniversary of the re-establishment of diplomatic relations between Italy and China, this article assesses the structure, dynamics and evolution of bilateral economic ties from the 1970s to 2020. Although the structures of trade and investment have changed over the past few decades, the article argues that the importance of the Chinese market for the Italian economy has always been overstated. Similarly to its European partners – but from a much weaker position – Italy faces a double dilemma vis-à-vis China: on the one hand, the Chinese market is too large for companies to overlook, but on the other hand political and commercial tensions between China and the West do not guarantee that market potential would inevitably result in profit opportunities. The economic relationship between Italy and China needs a “reality check” to rationally control the politically sensitive China debate after Italy signed the BRI memorandum in 2019.