Chinese Foreign Direct Investments in Italy and the "Golden Power"

Abstract

Foreign direct investments (FDI) play a crucial role as a significant source of external financing for countries globally and act as incentives for economic development. Historically, China was one of the largest recipients of FDI; however, in recent years, it has transitioned into a leading investor in foreign markets. China's outward foreign direct investment (OFDI) has seen rapid growth, and European nations, including Italy, are particularly appealing to Chinese investors. Examining the China-Europe investment dynamic, it is evident that numerous EU economies are now adopting more stringent protectionist measures and reassessing their inward investment policies. These regulatory measures have also been implemented by member states, exemplified by Italy's "Golden Powers Policy." This policy grants the Italian government special veto powers over transactions that alter the control, ownership, availability, or use of a "strategic asset." This work is structured into three chapters. The opening chapter provides an analysis of global FDI trends and the general framework established by EU Regulation 452/2019. The second chapter focuses on the China-Italy FDI flows and examines Italy’s Golden Power Regulation. The final chapter presents case studies of both Chinese and European companies involved in this phenomenon, with particular attention to their approaches and the different outcomes.