Dialogue Between Italy and China Is an Opportunity for All Concerned

MARCO TRONCHETTI PROVERA, CEO AND EXECUTIVE VICEPRESIDENT OF PIRELLI, AND BOCCONI ALUMNUS, EXPLAINS THE COMPANY'S RELATIONSHIP WITH CHEMICAL GIANT CHEMCHINA AND HOW THE ASIAN COUNTRY CAN BECOME A STRATEGIC PARTNER FOR ITALIAN COMPANIES

"The internationalization of Chinese enterprises creates new bilateral opportunities for entrepreneurial cooperation. In this scenario, Chinese companies have access to management and manufacturing skills that contribute to ensuring a more sustainable future for the country." Marco Tronchetti Provera is expressing these views from a privileged vantage point: a Bocconi Alumnus and member of the University's board, he is both CEO and executive vice-president of Pirelli, whose majority shareholder is ChemChina, and co-president of the Italy – China Business Forum. “Obviously," says Tronchetti Provera, "this must be done with a sense of reciprocity and of protecting the roots of Italian companies, as happened in our case. Pirelli is a company with a majority shareholder in China which, in supporting historical shareholders in the recapitalization of the firm, has kept headquarters and research in Italy, and maintained management continuity. In fact, there has been no significant change in our offices or factories, other than greater global competitiveness and greater opportunities through the exchange of knowledge and skills."
 
➜ Does the fact that ChemChina is state-owned affect day-to-day operations? Does this create mistrust in the West?
State ownership, not only in China, leads one to think about excessive bureaucracy and slow approval processes. In our experience this has not occurred, nor has there been an impact on day-to-day operations. Obviously it is about bringing together two different cultures, but integration is possible and profitable. China has clearly defined planning objectives that translate into long-term projects, achieved through an ambitious model of international relations. The ability to look at that part of the world must certainly include the flexibility to deal with a different cultural model. At the same time, however, it is useful to understand what the areas of mutual business opportunity are, so to enable the development of a win-win strategy. A demonstration is the interest raised by the initiatives promoted by the Italy-China Business Forum, a bilateral body established under the auspices of the two governments to promote economic relations between the two countries. The numerous collaborations between Italian companies and Chinese state-owned groups have brought benefits to all the parties involved, thanks to the complementarity of goals to be achieved through joint strategies.
 
➜ With what objectives do Chinese companies approach Italy, and Italian companies China?
The debate promoted by the Italy-China Business Forum has encountered great participation and mutual curiosity on the part of Italian and Chinese companies alike, confirming the liveliness of current bilateral economic relations. The Chinese world, both at the political and entrepreneurial levels, shows growing attention to areas such as design, agri-food, aerospace, health services and environmental sustainability, and potential for cooperation is very high. The ambition of Italy-China Business Forum is to create a platform for enhancing relations, transforming this potential into concrete Italian-Chinese business partnerships. For this reason, thanks to the Chinese co-president of the Forum, the Chairman of Bank of China Tian Guoli, in recent months we have promoted multiple occasions of exchange to address collaborations in various industries. An example was the Financial Forum held at Pirelli's headquarters and the China-Italy SME Trade and Investment Forum held in Beijing, devoted to small and medium firms. Both have allowed us to develop relations between Italian and Chinese companies, with positive results that push us to continue to consolidate the dialogue between our two cultures and economies.
 
➜ China's rapid growth and its resulting status as global economic competitor is, like globalization in general, viewed in the West as inevitable but not particularly well-liked. What do you think are the benefits for our system?
I am neither among those who have a negative view of globalization, nor those who see it as fatally inevitable. The opening up of the borders has provided important growth and exchange opportunities, which, for example, have allowed an Italian company like Pirelli to become first a multinational, then a global company. It is clear that it is an extremely complex phenomenon, but if we want to govern globalization rather than be subjected to it, I think we need to understand it and contribute to it with a constructive view. An issue of concern is the loss of influence of multilateral bodies that for decades have decisively contributed to global development. It is true that imbalances have been created, but it is also true that hundreds of millions of people have been able to get out of poverty through globalization.
 
Returning to China and its relationship with Italy, it is a country that has great economic complementarity with us, and this makes it our natural strategic partner. It is essential to interact globally with China, at a moment when it presents to the world a model based on economic integration and social inclusion. The Belt and Road Initiative, launched by President Xi Jingping, has the goal of offering a platform for economic cooperation based on joint development opportunities according to a win-win perspective.
 
➜ China's impetuous growth rate is slowly normalizing. At the end of May we witnessed the first downgrade in China's debt rating in 28 years. Could this evolution affect Chinese companies' strategies on foreign markets? Is it possible that China will re-orient its economy towards the domestic market?
The Chinese government is strongly committed to a restructuring of the economy aimed at re-balancing development drivers, to achieve growth that is more sustainable. China is therefore planning for a new growth model, which boosts domestic demand and consumption alongside public investment and exports. Given its size and growth rates, it is a country that will make an increasingly important contribution to the growth of the world economy. That is why it is important that Italy continues to engage in building synergistic ventures with Chinese companies.

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by Fabio Todesco
Translated by Alex Foti