China's reduction of import tariffs and the continuous opening-up of its markets under World Trade Organization (WTO) commitments will lead to brighter prospects for Sino-Italian economic ties, according to the president of the Italian-Chinese Chamber of Commerce.
Mario Zanone Poma predicts that the two-way trade will grow by some 25 percent this year, "if the current good momentum remains."
From January to April, the bilateral trade volume came to US$4.54 billion, a 22 percent increase year on year.
In the same period, China imported US$1.92 billion worth of goods from Italy, which was up 16.7 percent, while the country exported goods valued at US$2.62 billion to Italy, an increase of 26.1 percent on a yearly basis.
Poma spoke highly of China fulfilling its WTO commitments, saying it has so far achieved what it had promised to the world trade body at the end of 2001.
"China is making a very big effort to reach its WTO obligations," he said. "Its performance during the grace period deserves high marks."
Under its WTO membership, the world's fourth-largest trading power is allowed to open up some of its fledgling industries on a gradual basis during the first three years.
Poma said China should work on improving intellectual property right (IPR) protection.
"China has built a comprehensive legal framework for IPRs," he said. "And we hope its implementation can be strengthened."
As China continues to grow rapidly, it is only natural that more Italian investment will flow into the country.
The Italian chamber is looking for suitable venues in Shanghai and Beijing to establish commercial centres, like shopping malls.
These malls will be a mixture of Chinese and Italian culture, Poma said.
For example, the mall could be a hutong, a small lane, or a siheyuan-style building, which is a Beijing-style bricked courtyard. In it, high-grade Italian products such as home furnishings, fashion, food and wine could be sold.
"Currently, we are studying the feasibility of the idea," Poma said. "Some Italian retailers are interested in it."
The timing is perfect for such a move as China's retail and consumer markets will be entirely opened to foreign investors by the end of the year as a condition of WTO entry.
The world's leading retailers such as the US-based Wal-Mart and France's Carrefour and Auchan, have all entered China and are vying for market shares in the major municipalities, which are now open to them.
They are also preparing to enter the country's second and third-tier cities, as soon as restrictions are lifted at the end of the year.
By contrast, Italian retailers are latecomers relatively.
But entering more cities willhelp them catch up with the Chinese retail market, which was worth approximately US$554 billion in sales last year.
Apart from retailers, Italian firms in other industries are also showing more interest in the lucrative Chinese market.
According to Poma, nano and biotechnology could be among the many sectors that the two nations' industries could team up to explore.
And Poma says Italy is rolling out the red carpet as it is looking for Chinese investment, which would provide the latter with a springboard into Europe.
"Currently, Chinese investment in Italy is not that heavy, but it will grow in the future," he said.
Some big-name Chinese firms such as home electronic appliance maker Haier have already established bases in Italy.
And the chamber of commerce would be happy to accept more Chinese members, Poma said.
At present, the chamber only has a few Chinese members such as Italian branch of the People's Bank of China and some traders who are doing business in Italy.
Poma advised Chinese groups wanting to establish a presence in Italy to first conduct thorough market studies and get acquainted with the local legal and market situations. The chamber can help in this regard.
Poma also said the chamber will do its bit to promote bilateral trade and economic ties.
The president is pressing ahead with the establishment of a Sino-Italian conciliation center to solve business disputes.
"If everything proceeds well, the center can be set up within the year," he told China Daily.
The China International Economic and Trade Arbitration Commission, the country's leading arbitration institution, is teaming up with the chamber to form a mechanism that will allow Chinese and Italian business people to solve their grievances without going to court.
For Poma, the alternate method for dispute resolution benefits merchants from both countries.
"Chinese and Italian are face-savers," he said. "They prefer negotiation and mediation rather than resorting to litigation."
As for the market economy status (MES), Poma said China's market economy is improving rapidly.
China which faces the biggest number of anti-dumping appeals in the world always finds itself in a disadvantageous position because of its compromise to enter the WTO, which says other members can treat it as a non-market economy in dumping and subsidy cases until 2016.
(China Daily June 22, 2004)
