SHARE
COPY LINK

CHINA

Pirelli hits back at China deal critics

The boss of Italian tyremaker Pirelli on Tuesday accused those against the company's takeover by a Chinese firm of masking nationalist objections in calls for a change of industrial policy.

Pirelli hits back at China deal critics
Pirelli CEO Marco Tronchetti said he was worried by "outdated kneejerk reactions" to the deal. Photo: Giuseppe Cacace/AFP

Defending a €7.4 billion accord which paves the way for state-owned ChemChina to take control of one of Italy's industrial icons, Pirelli CEO Marco Tronchetti said the deal was good for the company and for Italy.

He insisted that jobs, the company's base and high-tech research and development activities would stay in the country and be strengthened.

"Some of the outdated kneejerk reactions worry me," Tronchetti said when asked about criticism of the deal from labour unions.

"A real industrial policy is about creating the conditions to attract investment which creates jobs, encourages training and bolsters technological development, leveraging the excellence that fortunately still exists in this country," he said in an interview with Corriere della Sera.

Tronchetti said Italy was lagging behind countries such as Britain, Germany and Spain, where inward investment has helped revitalize flagging automobile industries.

"Why are there these problems in Italy? The response cannot be a nationalist approach dressed up as industrial policy," Tronchetti said.

ChemChina's deal with Pirelli's largest shareholder represents the biggest single move yet in what is a growing trend for Chinese companies to acquire Italian assets.

That trend was highlighted by the media on Tuesday but reaction to the Pirelli deal has been muted, reflecting acknowledgement across the political spectrum that Italy needs investment to revive a stagnant economy and cut unemployment from current record levels.

Analysts have hailed the ChemChina tie-up as a perfect fit for the Italian tyremaker, predicting that the strength of the Pirelli brand combined with low-cost production in China and a greatly enlarged market footprint would strike fear into the hearts of rivals such as Goodyear, Michelin and Continental.

That view has helped to bolster shares in the group, which continued to rise Tuesday on the Milan bourse and are trading at a premium to the purchase price ChemChina is paying for its stake.

Prime Minister Matteo Renzi has yet to comment publicly on the deal, but Tronchetti revealed he had been briefed on the eve of the signing. "He grasped that it is a great opportunity for Pirelli," the CEO said.

Renzi has made closer economic ties with China a priority of his term and has urged Italy to be more open to investment. He chose Beijing for his first foreign trip after coming to power last year and has defended a series of labour market reforms as vital to attracting foreign capital.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

CHINA

China derides Copenhagen democracy meet as ‘political farce’

China on Tuesday blasted a democracy conference in Copenhagen attended by Taiwan's president and a Hong Kong activist alongside Danish government officials this week, qualifying it a "political farce".

China derides Copenhagen democracy meet as 'political farce'
Demonstrators gathered outside the Copenhagen Democracy Summit on Tuesday. Photo: Emil Helms/Ritzau Scanpix

The Copenhagen Democracy Summit was held Monday and Tuesday in the Danish capital and organised by the Alliance of Democracies, an organisation targeted by Beijing sanctions in March and founded by former NATO boss Anders Fogh Rasmussen.

In addition to Taiwan’s President Tsai Ing-wen and Hong Kong democracy activist Nathan Law, Danish Foreign Minister Jeppe Kofod also participated in the forum by video link, which Beijing said violated “the one-China principle.”

“This summit is a political farce,” the Chinese embassy in Denmark wrote in a statement published on Tuesday. “Inviting those who advocate Taiwan and Hong Kong ‘independence’ to the meeting violates the one-China principle and interferes in China’s internal affairs,” it said.

“Some hypocritical western politicians are good at meddling in other countries’ internal affairs and creating divisions and confrontation in the name of ‘democracy’ and ‘freedom’. They are bound to fail,” it added.

At the conference on Monday, Kofod said it was “deplorable” that Beijing had imposed sanctions on 10 European individuals and organisations in response to EU sanctions on Xinjiang officials over their actions against the Uyghur Muslim minority.

Like most countries, Denmark applies the one-China principle — under which Beijing bars other countries from having simultaneous diplomatic relations with Taipei — though it does maintain relations with Taiwan.

Cut off politically from the rest of China since the end of the Chinese Civil War in 1949, the territory is self-governing but is not recognised by
the United Nations.

Beijing considers Taiwan a rebel province that will one day return under its control, by force if necessary.

China’s sabre-rattling has increased considerably over the past year, with fighter jets and nuclear-capable bombers breaching Taiwan’s air defence zone on a near-daily basis.

“Our government is fully aware of the threats to regional security, and is actively enhancing our national defence capabilities to protect our
democracy,” Tsai told the conference in a video address on Monday. US President Joe Biden is expected to present his China strategy soon, as
calls mount for him to publicly commit to defending Taiwan militarily in the event of a Chinese attack.

SHOW COMMENTS