Italy-China Trade Relations

The nineteenth century was a period of increasing heteronomy. The Chinese dynasty, overwhelmed by economic difficulties and consequent uprisings, as well as by the fragmentation of powers, determined by the extension of the empire, which had caused, since about 1820, a serious deficit in the trade balance, mainly due to the opium trade. The Opium War was triggered by England’s need to safeguard the balance of triangular trade between London, Canton and India. The British troops found the Manchu government completely unprepared and above all incapable of accurately assessing the political situation and the extent of the economic relations established by foreign trade in Guandong and Guangxi. In this chapter, through the analysis of the literature, we will try to understand how all these events and others have influenced the Chinese economy, politics and society in order to understand, in the continuation of this work, the influence and role of the Italy.

The splitting up of the development paths of the west and the rest of the world has been defined by economic historians as “the great divergence”. Pomeranz (The great divergence: China, Europe, and the making of the modern world economy. Princeton University Press, Princeton, 2000) proposes another approach also based on the studies of Bin (China transformed: Historical change and the limits of European experience. Cornell University Press, Ithaca and London, 1997) who adopts a comparative approach to try and identify the terms of the divergence between the analysed phenomena instead of always assuming one of the two terms as the norm. In this chapter, in summary, the events arising from the politics of European imperialist powers (and some particularly poorly highlighted) in China will be analysed. Rebellions had multiplied, mainly due to the growing gap between the population and the extension of arable land. Among these, we focused on: the Taiping revolt (1851–1864), the Boxer revolt and the 1911 revolution. During the nineteenth century, the interest of the Western colonial powers grew, as well as that of Russia and subsequently of Japan: some countries considered the division of China into spheres of influence an inevitable event, even if each state pursued its own ambitions for different interests.

This chapter will examine the first commercial solutions between Italy and China and the influence of Italian politics. The analysed period is particularly significant for the history of Italy because it is rich in important events and phenomena; it is also called the Belle Époque. This term indicates the European historical, socio-cultural and artistic period that goes from the last twenty years of the nineteenth century to the beginning of the First World War. Moreover, from an economic point of view the period between 1896 and 1907 is called the Giolittian period. According to Gerschenkron’s estimates (1962; Il Problema storico dell’arretratezza economica. Bellknap, Cambridge, Mass, 1965), in this period the average rate of growth for Italian industrial production went from 0.3 to 6.7% and then fell, between 1908 and 1913 to 2.4%. According to the Fenoaltea calculations (La crescita industriale delle regioni d’Italia dall’Unità alla grande guerra: una prima stima per gli anni censuari. Bank of Italy, Rome, 2001), the annual growth rates, again for industrial production and for the same periods, were, respectively, 7.6 and 2.3%. Istat calculated figures for 0.5 and 1.5%. Leaving aside a discussion of the reasons for the various degrees of reliability of these indices, as well as those of the contrasting historiographical uses that have been made of them in order to theorize or not on the existence of a take-off in the process of industrialization of the country, it is a known fact that the productive expansion in the Giolittian age (about 1901–1914) had no precedent with respect to that of the post-unification decades, despite the setback of 1907. Notwithstanding the persistence of protectionist duties, whose incidence was however attenuated by the increase in prices, progress in transport, the new lines of exchange, the reduction of freight rates and the revision of trade treaties all supported the expansion phase, as did the increase in international trade. It was in this climate that Italy, in order not to be outdone by the other capitalist powers, initiated its first commercial treaties with China.

This chapter offers an historical economic analysis of Italy’s international trade relations: in particular, the worsening of trade relations with France that started in 1888 was one of the reasons for the gravity of the crisis that manifested itself in the following years and that was suffered above all in southern Italy. In the long run, however, it had the positive effect of increasing the multilaterality of Italy’s international relationships, including that with China. Italian foreign trade appears positive during this period (1861–1919). As reported by Zamagni (Dalla periferia al centro. La seconda rinascita economica dell’Italia 1861–1981. Il Mulino, Bologna, p. 156, 1990) between the years 1866–68 and 1913 the annual growth rate of imports was 3.1% and that of exports 2.7%. However, Italy’s share of world trade fell (from 3.1 to 2.6%) as it failed to keep pace with the expansion of international trade in other countries (Federico in Meridiana 4:163–196, 1988). As regards exports, those of raw materials (sulphur and metallic minerals) and traditional agricultural products (oil, wine, eggs and rice) declined. Only raw hemp and rawhides registered an increase in the category of unprocessed products. This result was certainly due to the process of industrialization initiated in the 1880–1913 period which, on the one hand, had transformed the productive sectors and, on the other, had expanded the internal demand for raw materials and foodstuffs. The scenario changed after 1923. One of the main features of this change was the more marked territorial diversification of Italian foreign trade which, while it gives a glimpse of German predominance, does not recreate the dependence of Italian trade on a single country that existed in the period up to 1887 (year of the agrarian crisis and of the law of 14 July 1887 imposing the agrarian tariff with a distinctly protectionist power (Toniolo, in Storia economica dell’Italia liberale 1850–1918. Il Mulino, Bologna, 1988) which led to the break with France).

In this chapter, the import and export between Italy and China will be examined, within a particular and complex period such as that between the two world wars. It was characterized in Italy by the rise of Mussolini and the fascist government. The accelerated Italian industrialization process following the Great War had become somewhat unbalanced. This disorderly and artificial expansion would have required, at the end of the conflict, a radical restructuring and a renewal of the plans to allow the resumption of peacetime production and the reintegration of the productive apparatus into a market system. In 1922, the political crisis reached a peak in Italy: the March on Rome of 28 October 1922 carried out by the Blackshirts saw the then king of Italy Vittorio Emanuele III refuse to sign the declaration of a state of siege and decided to entrust Benito Mussolini with the task of forming a new government. The economic and financial objectives of the government programme in fascist times, in short, were: (a) to reduce the deficit of the public budget; (b) to pursue a “productivist” economic policy that would provide more space for private entrepreneurship; (c) to make available a greater share of national savings for private investments (even if, despite Italy being a rural country and the exaltation of the myth of the land and the return to the countryside, its economic policy aimed to favour the interests of the great industrial groups) (Zamagni in Dalla periferia al centro. La seconda rinascita economica dell’Italia 1861–1981. Il Mulino, Bologna, 1990, 349–377; Bof in Grande Guerra e primo Dopoguerra (Chap. V, pp. 89–118), Economia e politica economica in età fascista (Chap. VI pp. 119–156), Dalla guerra d’Africa alla seconda guerra mondiale (Chap. VII, pp. 157–186) in L’Italia economica, 2015, 118–119). In 1927, the labour charter was issued, which was the manifesto of the corporate state: economic life, therefore, came to depend more and more on the state. The crisis of ‘29 involved, among other changes, the definitive crisis of mixed banks, thereby consolidating the process of banking concentration. Moreover, even before the political circumstances underlying the Ethiopian War and the sanctions imposed by the League of Nations, other factors, such as the defence of the gold standard of the lira to the bitter end, contributed to the affirmation of a markedly restrictive policy, which meant that Italy became increasingly isolated from the international market (Petri in Storia economica d’Italia. Dalla Grande Guerra al miracolo economico (1918–1963). Il Mulino, Bologna, 2002, 113–157; Bof in Grande Guerra e primo Dopoguerra (Chap. V, pp. 89–118), Economia e politica economica in età fascista (Chap. VI pp. 119–156), Dalla guerra d’Africa alla seconda guerra mondiale (Chap. VII, pp. 157–186) in L’Italia economica, 2015, 158–159).

This chapter gives an overview of what the end of the Second World War entailed, the difficulties and changes faced by the two countries within the new world order that was emerging after the war, and how these influenced a more convinced recovery relations between the two countries to the present day. Before the communist party came to power, the Chinese economy had only undergone sporadic modernization. The Soviet Union provides the new regime, which increased the sphere of socialist influence to about half a billion people, both as a development model and as a source of financial support. But as early as the end of the 1950s, doubts about the relevance of the model lead, on both sides, due to political and ideological frictions, to the 1960 breakup originating on the Chinese side. The communist leaders, once the destruction linked to war (first against Japan, then the civil war between nationalists and communists) had been repaired, found themselves having to face questions concerning development, ranging, from how to finance investment to which industrialization strategy to adopt and to which role to give to the peasant class. Italy also had to face up to a tough post-war period and will resume its economic and commercial relations with China after 1969, with official recognition as a People’s Republic.

In this work we focused on the long-term trade relations between Italy and China to try to reconstruct and understand the commercial and economic interests of two countries that today, in this period of systemic globalization, are increasingly involved in a context where China more than others, over the last quarter of a century, has experienced an improvement in the quality of life of most of its population. It has also seen a remarkable development of its regions and coastal metropolises, an increase in international trade and the expansion of the range of exports, together with the ability to withstand external shocks. Despite the rigidity of the Chinese political system, where the communist party has retained a monopoly on power, it has also shown a great capacity for adaptation. Italy’s penetration of China during the Belle Époque, and both before and between the two World Wars, though greater in numerical terms than in previous years, remained extremely modest when compared with the trade exchange that China already had with other European and non-European countries. On an economic level, various schemes for cooperation were attempted but never achieved the desired results. There were various reasons for these failures. Nevertheless, trade relations between Italy and China are an interesting case for illustrating the complexity of international dynamics. The absence of diplomatic relations between the two countries was actually counterbalanced by a reciprocal interest, seen in the development, albeit partial, of significant relations, though to a lesser extent compared with the other European countries. These contacts and this interest would lay the foundations for the diplomatic revolution in 1970 which in turn would lead to great changes. After the painful period of the Second World War and the political and economic changes in Italy and China, trade relations between the two countries strengthened and, given the trade trends and the trade agreements analysed, it can be broadly assumed that economic relations between Italy and China will become even closer, with plenty of room for further development, and stronger, with a positive influence on their future political and diplomatic relations. the growing commercial understanding is a further source of support for large-scale co-operative schemes, and not only in the economic sphere, where we find the memorandum signed by the Ministry for Foreign affairs and the National Development and Reform Commission of the People’s Republic of China on the “financial cooperation to support the development of small and medium-sized enterprises and the setting up of a bilateral working group in this sector”. Trade relations between Italy and China are continuously being strengthened thanks, also, to different cultural initiatives. Ultimately, Italy is moving closer to China and the initiatives undertaken are seeking the secure establishment of Italian firms on the Chinese market; this policy offers ample possibilities for successful Italian investment and much more besides.