Sun, April 01, 2012
China > China & World

Italian PM eager for investment

2012-04-01 03:29:04 GMT2012-04-01 11:29:04(Beijing Time)  China Daily

Premier Wen Jiabao welcomes visiting Italian Prime Minister Mario Monti at the Great Hall of the People in Beijing on Saturday. Liu Weibing / Xinhua

In his first visit to China since taking office, Italian Prime Minister Mario Monti expressed a desire for more investment from China to spur new growth, as the current austerity measures are potentially damaging the country's economic growth.

"I saw great interest in mutual investment from both sides," he told reporters on Saturday after his meeting with Premier Wen Jiabao.

Monti said the Chinese government has encouraged domestic enterprises to expand their investment in Italy.

Wen has also expressed hope that Italy will push the European Union to create a more open and convenient investment environment, according to Monti.

Monti said he hoped his trip could "generate some new enthusiasm toward the country".

In the four months since he took over from his predecessor Silvio Berlusconi, Monti and his technocrat cabinet have staved off a crisis that could push Italy into insolvency.

"When I took office, I was deeply concerned that despite our efforts, Italy might be a new flame on the fire," Monti said. "This so far has not happened and we believe will not happen."

"Italy is becoming more disciplined, market-oriented, and business friendly," he added.

Spending cuts, tax increases and pension reform have put public finances back on track and restored the EU's confidence in the debt-ridden country, according to Luo Hongbo, director of the Italy research office of the Chinese Academy of Social Sciences.

"The belief that Italy can't make it through the sovereign debt crisis has gradually faded," Luo said.

As a positive sign, yields on Italy bonds have dropped, and the budget deficit fell to 3.9 percent of its GDP in 2011 from 4.6 percent in 2010.

Luo noted that the austerity moves may take a toll on economic growth. The country's economy grew 0.4 percent last year compared to 1.8 percent the previous year. The country's central bank has predicted Italy's economy is likely to contract 1.5 to 2 percent in 2012.

In light of this, external stimulus is crucial for the third-largest eurozone economy, Luo said.

Monti said he had met Lou Jiwei, chairman of the China Investment Corporation, China's sovereign wealth fund. He declined to reveal details of the talk, but said a working group made up of CIC, the Italian embassy and the administration of Rome has been set up. The group will identify possible investment opportunities and discuss hurdles that impede investment.

He said during Lou's last year trip to Italy, CIC had noted the "insufficiently flexible labor market" as one of the hurdles, a sector the government is working to reform.

Italy will have a joint development program with China in a Sub-Saharan African country, Monti said at the conference.

Monti said he will meet Vice-Premier Li Keqiang and Governor of the People's Bank of China Zhou Xiaochuan during the Boao Forum for Asia Annual Conference 2012.

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