Mysterious rise in Italian exports to China


Exports from Italy to China in February 2023 amounted to just over €3 billion, an increase of around 130%. compared to February 2022, when its value was EUR 1.3 billion. For comparison, in January 2022, Italy exported goods and services worth around one billion euros to the world’s second largest economy. Such a boom would be difficult to explain even under normal circumstances. Now that Russia’s war in Ukraine and supply chain upheavals disrupt traditional trade flows, it’s all the more mysterious. Especially considering the current Italian policy towards China. It is true that Italy is the only country of the Group of Seven (G7) that has joined China’s gigantic investment plan – the Belt and Road Initiative, but the economic benefits of this alliance since 2019 are very limited. Moreover, relations between Rome and Beijing had already cooled significantly under Prime Minister Mario Draghi, and his successor seems to continue in this direction. Giorgia Meloni has signaled to the US that she will withdraw from the controversial deal with China before the end of the year. What makes these figures even more puzzling is that it all boils down to a very specific segment of the pharmaceutical sector. More specifically, medicines consisting of mixed or unmixed products for therapeutic or prophylactic purposes, packaged in measured doses. Exports of this product group increased in February this year. to €1.84 billion, which accounted for almost two-thirds of all Italian exports to China this month. Why this increase? Italian media speculates that the driving force is growing Chinese demand for UDCA – a chemical mainly used in liver medicines that is said to help prevent Covid-19. So, the abrupt end of China’s zero COVID strategy and the subsequent spread of the virus across the country may be the cause of this export boom. However, the vast majority of China’s population seems to have contracted Covid-19 in December and January, meaning they would have recovered sooner than Italian exports started to pick up. But UDCA demand alone does not explain the peak exports. Industria Chimica Emiliana, an Italian company that is the world’s largest integrated producer of UDCA and bile acid products, has annual sales of around €300 million, just a fraction of the jump in Italian pharmaceutical exports to China. Doubts are growing, especially when one considers the latest Chinese data on the purchase of drugs, which are allegedly arriving en masse in the country. Counting the shipping time, the drugs – regardless of their type – should have reached China and were included in the April trade data. Meanwhile, there was no noticeable change in the published data. One explanation could be a shift in regional trade. “It’s probably the demand for drugs from China,” said Peter Ceretti, a director at Eurasia Group who investigated the case.
“Major Italian pharmaceutical manufacturers ship as much Italian products as they can. And perhaps some manufacturers are moving German and other EU-produced drugs to Italy for re-export to China.” Source:

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