Cinderella has a lot to offer China

Italy may seem the least attractive stop on li keqiang's visit, but cultural affinity

The visit of Prime Minister Li Keqiang to Russia, Germany and Italy, and his presence at the 10th Asia-Europe Meeting on Oct 16-17 in Milan, are clear signals of China's firm desire to improve collaboration with partners and to advance a long-term international strategy.

Closer collaboration and understanding between China and the European Union can play an important role in a quicker recovery of the global economy. It is also a good opportunity to reinforce East-West cultural links and bolster common actions on important universal issues such as poverty and food security.

Europe still represents for China a fundamental partner for economic growth and a clear reference point in a more and more multipolar world. However, the fact that the EU still appears divided and without a unique voice and leadership brings no advantage to any party.

Russia, rich in natural resources, has an economy that is very complementary to China's, and the two countries plan to boost total trade volume to $100 billion or more in the next year.

Germany is China's largest European partner not only for trade and investment but also for technical exchanges.

Italy is playing the role of Cinderella among the three countries visited by Li, with its uneven performance making it unable to take full advantage of China's economic growth. This is despite Italy still having one of the largest economies in the world, as well as holding the rotating presidency of the EU. It is also despite friendship with China being part of Italian history. Reciprocal cultural affinities and attractions are deeply rooted among the people of the two countries. That is, there is a lot of potential but limited results.

As an Italian citizen and head of the European branch of a Chinese company, I would like to share some ideas, trying to look at the future in an optimistic and also realistic way.

The 2014-16 plan agreed upon in June during Italian Prime Minister Matteo Renzi's visit to China is excellent and can help expand bilateral trade and cooperation in environmental protection and energy, agricultural products and food security, urbanization, medicine and aviation.

However, these plans must be considered the starting point and not the final result. Too often, representatives of Italian institutions or even private companies have paid a lot of attention to the execution of memoranda of understanding or similar agreements with Chinese counterparts that were not followed by concrete and timely actions. I hope Renzi's government will invest more time and resources in developing closer relations with China as other EU members have done for years and, consequently, with better results.

One of Italy's main complaints is that the trade imbalance is mainly due to non-tariff barriers that impede access to the Chinese market for Italy's small to medium enterprises. But looking at the experience of other EU members, we should first improve the organization of our Italian system and be more supportive, especially to Italy's medium-sized companies that have competitive products and international managers able to understand and even anticipate Chinese customers' needs as well as work well with local counterparts. (Small firms have limited chances in a large market such as China.)

In an atmosphere of global competition, is it very hard to export without investing in innovation and without adjusting one's own products and services to local needs and traditions, unless you have a strong and well-known brand. Besides its traditional areas of luxury fashion, furniture and food, Italy should grab all the growing opportunities in the Chinese market arising from the rapidly growing middle class and changes in the social services arena.

Another imbalance is that Italian investments in China are more than 10 times larger than Chinese investments in Italy. First Italy should make its efforts to attract foreign investment more efficient, professional and less fragmented. The Renzi government should keep improving our economic and industrial environment to make it friendlier and less complicated both for national and foreign investors, especially in areas such as bureaucracy, fiscal pressure, services and legal certainty. That is, make the Italian system more efficient and attractive to firms and institutions willing to invest and create new jobs.

At the same time, Chinese companies should improve their own organization and corporate governance in terms of foreign investment. Even when they operate abroad, most Chinese companies tend to bring with them their own centralized management and organizational model, which shows their inexperience and evident limitations in properly managing overseas investments and foreign human resources.

For Italy, the coming Expo Milano 2015 will be a singular opportunity to promote its own economy and values, and reinforce friendships and business relationships with international partners, especially China.

Finally, in the relationship between China and the EU, we have to reserve a special space for culture. Business, finance and the economy are obviously important to the progress of our countries, but compared with culture, they are given to change. Business, if not sustained by culture, can be volatile and subject to being discarded. Culture is the only thing capable of creating steady conditions for reciprocal dialogue and mutual understanding. Both China and the EU should put more effort and resources into the reciprocal promotion of our great cultures through things like tourism, exhibitions and movie co-productions to favor a deeper and faster integration, especially among students and younger generations.

The author is the general manager of Hengdian Group Europe (Milan) and a recipient of the China National Friendship Award in 2010.

(China Daily European Weekly 10/17/2014 page11)