Economic relations between Italy and China

China is the world’s largest fast-growing middle-income country, while Italy remains the eighth economy globally, but with a gross domestic product (GDP) that has now been contracting for three of the past five years (2008, 2009, and 2012), declining over 6 percent since the start of the global financial crisis. Yet, China and Italy display some striking similarities in their economic structures. Both countries rely heavily on manufacturing, and there is an overlap between the industrial sectors in which both specialize. 1 Manufacturing industries in Italy cluster in certain locations and consist mostly of small and medium enterprises (SMEs), much the way production chains are organized in some parts of China, especially in key provinces such as Zhejiang and Guangdong. As this chapter will argue, such similarities have profound consequences on bilateral economic relations.