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Interview: Amb. Iannucci on China’s growing interest in Italy

Despite the economic crisis, China’s “demand” for Italy is growing. Indeed, according to Ambassador to Beijing Massimo Iannucci, Chinese tourism in Italy rose 130 % in 2011. In an interview for Chinese on-line magazine Sohu, the ambassador addressed themes ranging from the economic crisis in the eurozone to the impact of the new government on Italian expectations, to economic relations and the friendship between Italy and China.

1. Your Excellency, the European debt crisis has created problems for many European countries and led to the fall of the government (Italian); as a G8 member, Italy has been affected too. Could you explain the mechanisms that led to the debt crisis in Italy?

“The sovereign debt crisis that began in Greece, Ireland and Portugal spread in 2011 to larger economies like Spain and Italy. The combination of high public debt and limited growth in the eurozone exacerbated the structural problems of various economies, leaving room for international financial speculators to rake in big profits. At the same time, the rising cost of funding the public sector was transmitted to credit in general. In a global context marked by sluggish economic activity and trade, deteriorating business and consumer confidence is having a negative impact on aggregate demand, thus heightening the effects of the crisis itself. Nevertheless, financial markets, as well as the international press, are overreacting to in economic and financial developments in Europe and Italy, feeding a vicious cycle of restrictive measures, weak demand and financial difficulty. Italy has a solid economic foundation and a high productive capacity, along with a highly skilled and creative workforce that is the fruit of our country’s cultural history. European institutions are confronting the crisis with new instruments that have been created over recent months, and many countries are already adopting structural reforms, not least as regards public finances; these interventions are aimed at re-establishing market confidence and at laying down a solid base for future growth”.

2. The debt crisis led to the fall of the Berlusconi government, and now the post of Prime Minister is in the hands of economist Mario Monti. In your opinion, how much can the formation of this new government do to resolve the crisis, and what are Italians hoping for?

“Prime Minister Berlusconi’s resignation was not directly linked with the Italian debt crisis, although undoubtedly the economic climate has strongly influenced the government’s action. Prime Minister Monti is currently giving new impetus to efforts at overcoming the difficulties, although, given the widespread uncertainty on the world scenario, it is difficult to make predictions. To be sure, my hope and that of Italians in general, is that stability will be regained as soon as possible. The formation of a technocratic government may make possible some responses long-awaited by the Italian civil society, in particular with regard to those profits and privileges that have slowed development over recent years. After initially focusing on improving public finances, the new Monti government has, in fact, undertaken a growth stimulus programme poised to free up energies already present in the Italian economy but long-since held back. The government’s measures aim to fight tax evasion, increase job market flexibility and productivity by generating competition, giving incentives to the capitalisation of SMEs, with the goal of increasing their average size and investing in infrastructure and development in southern Italy”.

3. There is much talk in the Western media of China saving Europe. How could China have a role in this crisis? In your opinion, can Europe get out of this situation on its own? How do you view Europe’s relations with China in this regard?

“Europe needs China, at least as much as China needs Europe, given the commercial, financial, monetary and political relations the two regions entertain. Financial support by China for the EU appears feasible, first of all, through multilateral organizations – and first among these, the International Monetary Fund – within a framework of greater strategic collaboration between the EU and China. A further and incisive contribution that China could make to resolving the current economic and financial crisis would consist of domestic economic policies aimed at correcting the external imbalances triggered by a development model weighted against investments in the manufacturing sector that have long hampered domestic demand. That said, Europe has all the economic and interpretative means for getting out of this crisis on its own steam if it renews the community spirit that, over the past 60 years, has allowed the EU – of which Italy is a founding member – to achieve previously unimaginable results”.

4. Italy is one of the preferred destinations of a great many Chinese tourists. Has this European crisis had an impact on the flow of Chinese tourists over the past year?

“The number of Chinese tourists who came to Italy in 2011 was up 130% on the previous year, for a total of 230,000 visas (as opposed to 100,000 in 2010) – more than any other European country and, in any case, beyond our rosiest expectations – the fruit of a visa facilitation policy adopted by our embassy in full compliance with Italian and Schengen norms. We increased the staff dealing with visa applications for tourism and business and the results were not long in coming, a sign that the “demand” for Italy is growing. We predict that the trend will continue in 2012, and the goal is to further increase the number of tourists, business persons and students coming to Italy”.

5. Recent media inquiries have revealed a series of criminally-motivated episodes in Italy: do you think this trend is linked with the crisis? So you think that episodes of this sort will have an impact on the tourism sector?

“Unfortunately the economic crisis has encouraged crime and illegal practices. Nevertheless, the problem is limited to isolated incidents and the data show that it has not influenced tourism; neither do I believe that it will in the future”.

6. The year 2011 was the Year of China in Italy, which is now coming to an end. As Chinese foreign affairs bodies have been very active, what activities is Italy thinking of promoting in order to foster the development of relations between our two nations?

“The high level institutional bilateral meetings planned for the coming year will surely offer an opportunity to strengthen relations between Italy and China and facilitate business. Moreover, I would like to recall the meetings of the Intergovernmental Committee and the Joint Italy-China Commission to be held in Rome in the near future, and the Milan Expo in 2015, as occasions that will offer opportunities for integration at economic, academic and tourism levels. We must add to that the activities we are arranging with the Chinese media to build the Chinese public’s knowledge of the Italian economy and culture, as well as our close collaboration with the Chinese Trade Ministry and participation in the various sector trade fairs and business encounters to be held in Beijing this year, the goal of which is to work together to cultivate the interface between our two countries”.