Momentum will be kept if Italy keeps door open to China, ambassador says

China's investment in Italy soared to 5.7 billion euros in the first seven months of the year, five times what it was at the start of the year, says China's Ambassador to Italy, Li Ruiyu.

China's Ambassador to Italy, Li Ruiyu, says there is now essentially "equilibrium in investment between the two countries". Fu Jing / China Daily

This explosive growth in Chinese investment was the result of three big deals, Li says during an interview with China Daily days before a visit to the country by Premier Li Keqiang.

The sound relationship between China and Italy, which now holds the presidency of the European Union, has "always run ahead of Sino-EU ties", and the momentum of China's investment will be maintained if Italy continues to keep its door open to Chinese investors, Li Ruiyu says.

"I think this is just the beginning, and there will be more investment soon if the Italian government makes it a little easier."

Rapid growth in China's investment presence in Italy has made its current stock equal to that of Italy in China, Li says.

"We now essentially have equilibrium in investment between the two countries."

Two deals involving businesses connected with energy accounted for almost half of China's 5.7 billion investment in the first seven months of the year. In July, China's State Grid bought a 35 percent stake in Italy's electricity network for 2.1 billion euros. Six months earlier, Shanghai Electric bought a 40 percent stake in Ansaldo Energia, which makes power generation plants and components, for 400 million euros. The State Grid investment is by far China's biggest in Italy.

In addition, China's financial institutions invested 3 billion euros in the first seven months of the year to enter into partnerships with five Italian heavyweights, such as the oil and gas multinational Eni, Telecom Italia and Fiat Chrysler, Li says, without being more specific.

The year is one of "milestone significance" for both countries because China and Italy are marking the 10th anniversary of their strategic partnership, he says, and next year the two will celebrate the 45th anniversary of their diplomatic relationship.

"Given the enduring sound and constructive partnership, Italian Prime Minister Matteo Renzi visited China just four months after taking office," Li says. "Four months on, Li is paying a return visit."

Premier Li will be in Italy over four days from Oct 14 after visiting Germany and Russia and, the two premiers will look to tap potential to "boost the bilateral relationship to a new high", the ambassador says.

Li is due to address the UN Food and Agriculture Organization in Rome and attend the 10th Asia-Europe Meeting before he flies back to Beijing on Oct 17.

Li Ruiyu, who has years of diplomatic in four countries under his belt, says the European debt crisis is "basically over", even if Italy's economic indicators are "not that satisfactory".

Its economy shrank 0.2 percent in the second quarter, compared with the first quarter, following retraction of 0.1 percent in the first quarter, compared with the previous quarter. In July the jobless rate rose to 12.6 percent.

The country has also encountered deflation, a phenomenon not seen in the country for 55 years, with the consumer price index falling 0.3 percent to September year-on-year and 0.1 percent to August year-on-year. However, Li says he is confident about the country's prospects of economic recovery, even if the process is slow.

He bases this confidence on Italy's "sound economic bases and structure" and the fact that the government has sped up the process of privatization and improved the efficiency of the labor market.

"At the same time, Italy is pushing forward with reform of the political system, and I think vigor in both economic and political arenas will be unleashed soon."

fujing@chinadaily.com.cn

(China Daily European Weekly 10/10/2014 page10)