Italy's New Gambit: Courting Chinese Capital Beyond the Belt and Road

XIAMEN, China – September 14, 2026 – Amidst the bustling halls of the 26th China International Fair for Investment and Trade (CIFIT), the Italy National Pavilion stood as a polished testament to a strategic pivot. Under the banner “Italy: A Land of Opportunities,” a high-level delegation curated by the Italian Trade Agency (ITA) and key government ministries made a sophisticated pitch to Chinese capital, trading on its reputation as the EU’s second-largest manufacturing power.

While the scent of Italian coffee and the taste of Padano cheese offered a touch of “la dolce vita,” the core message was one of serious business. Rome is actively seeking foreign direct investment (FDI) to energize its industrial base, with a sharp focus on automotive, aerospace, green supply chains, and life sciences. A flagship seminar on investment policies drew over 200 attendees, where officials detailed a framework of “full-cycle supporting services” for foreign investors. Amedeo Teti, a Director-General at the Ministry of Enterprises and Made in Italy (MIMIT), gave a comprehensive overview of Italy's new framework, while other officials elaborated on tailored measures and facilitation for strategic projects. But behind the polished presentations lies a far more complex reality, one where Italy must navigate the crosscurrents of economic necessity, EU-wide de-risking strategies, and a post-Belt and Road relationship with Beijing.

A Strategic Recalibration

Italy’s charm offensive in Xiamen marks a significant recalibration of its economic engagement with China. The era of blockbuster Chinese acquisitions, which peaked with ChemChina’s €7.1 billion takeover of tire giant Pirelli in 2015, has decisively passed. Since then, Chinese FDI into Italy has seen a dramatic decline, falling from $650 million in 2019 to just €140 million by 2022, with some years even recording negative flows. The cumulative investment stock, while still placing Italy as the EU’s fourth-largest recipient, belies a cooling trend.

This shift was formalized by Italy’s high-profile withdrawal from China’s Belt and Road Initiative (BRI) in December 2023. Italian officials, including Foreign Minister Antonio Tajani, publicly stated that the infrastructure pact, signed in 2019, had failed to deliver the anticipated economic windfall. Instead of boosting Italian exports, the initiative coincided with a ballooning trade deficit with China, which reached $37 billion in 2024. The exit was a clear signal of Rome’s intent to depoliticize its economic ties and align more closely with its G7 and EU partners.

Today, the investment landscape looks vastly different. Chinese capital is no longer targeting marquee strategic assets or infrastructure. Instead, the focus has shifted toward acquiring industrial know-how and supply chain access through smaller, often unlisted, manufacturing firms. This new phase of investment values Italy’s deep engineering expertise and its renowned network of small and medium-sized enterprises (SMEs) that form the backbone of the “Made in Italy” brand.

The 'Golden Power' Paradox

To capture this new wave of investment, Italy’s pitch at CIFIT centered on a streamlined, investor-friendly ecosystem. Officials from MIMIT and its specialized units, STCAIE and UMASI, held numerous B2B meetings, promising a “one-stop shop” for advisory services and help navigating local rules and incentives. This government-led facilitation is designed to cut through Italy’s notorious bureaucracy and present a competitive alternative to other European hubs.

However, this open invitation exists in a delicate balance with a powerful counter-force: Italy’s “Golden Power” legislation. Strengthened significantly in recent years, this regime grants the government sweeping powers to review and even veto foreign investments in sectors deemed strategic to the national interest. The scope is broad, covering not only defense and energy but also telecommunications, critical technologies, and even the agri-food sector. This framework, aligned with the EU’s wider FDI screening regulation, introduces a layer of political risk and uncertainty for non-EU investors.

This paradox is at the heart of Italy’s challenge. While it actively courts Chinese capital, it has struggled to attract the large-scale greenfield projects in next-generation industries that have flowed to its neighbors. Countries like Hungary, Germany, and Spain have become magnets for Chinese investment in electric vehicle (EV) and battery gigafactories. Italy, despite its storied automotive heritage, has largely missed out, indicating that its package of incentives and regulatory assurances may not yet be competitive enough for the capital-intensive projects reshaping Europe’s industrial grid.

Reshaping 'Made in Italy'

The sectors targeted by the Italian delegation—automotive, aerospace, green supply chains, and life sciences—represent the future of the nation’s industrial identity. Chinese investment, if channeled correctly, could provide the capital and market access needed to accelerate innovation in these fields. In the automotive sector, while a major Chinese EV plant remains elusive, opportunities abound in components, high-end design, and e-mobility solutions. The right partnership could fuse Italian engineering flair with Chinese manufacturing scale.

In the green economy, Italy’s prospects may lie not in competing for massive battery plants, but in specializing in higher-value segments of the supply chain. With Europe’s focus on circularity, significant opportunities exist in battery recycling and second-life storage systems, areas where Italian industrial agility could be a key advantage. Chinese leadership in solar and wind technology could also find fertile ground as Italy pushes forward with its own energy transition.

The life sciences and aerospace sectors present a similar dynamic. Both are high-tech, R&D-intensive industries where Italy boasts world-class expertise. Chinese capital could fund cutting-edge research in biopharma or advanced materials. However, these are also the very sectors most likely to trigger intense scrutiny under the Golden Power rules. Any potential investment would be carefully vetted for risks related to technology transfer and national security, creating a high bar for entry.

Ultimately, the success of Italy's strategy will depend on its ability to thread a needle: attracting FDI to upgrade its industrial base without ceding control over its most strategic technological assets. The effort at CIFIT shows a clear recognition that the future of “Made in Italy” may increasingly involve capital and partners from China, but on terms that are dictated by Rome’s new, more cautious, and security-conscious playbook.