The myth of the Chinese tourist who boosts the economy

Let’s be honest, what is the first thing that comes up in our minds when we think about China and its citizens? You are right, that one. We think about the typical Chinese tourist carrying shopping bags that hangs around via Condotti or via Monte Napoleone. But why do we think so? “It’s obvious! Everybody love “made in Italy” and these rich Chinese that come in our shops prove it, we think. Is this the case? Not at all.

In the last 30 years, Chinese people made us think that they will become rich and then will spend their money buying our amazing products. However, in the end they acquire companies and real estate properties, barely others’ services and products.

The first clear indicator comes from the Chinese trade balance, the account that quantifies the difference in value between exported and imported goods. Results are evident and challenge another prejudice, the one that sees China as an import-driven country. In fact, over the last 5 years, the Chinese trade balance reported a negative outcome in only 4 months out of 60, with values above the average in the last months with a peak of CNY63.3bn (about €9bn) on February 2016.

The second indicator is represented by the evolution of the Chinese economy. In contrast to what we may think in the West, China is not a place where they copy western products and apply lower prices. The “new” China is an attractive investment environment for hi-tech, biotech, innovation in general, and the environmental and service sectors. On the other hand, heavy and light industry and real estate related sectors will decline somewhat to get rid of a high level of overcapacity installed.

A simple but effective example is the penetration of Chinese products in the Italian market, while the vice versa is declining. Think of giants such as Huawei, which celebrated the first million smartphones sold in Italy in 2014, and Lenovo, which has gained almost 20% of the Italian market of personal computers.

It is interesting to notice how we still believe in the myth of the rich Chinese who comes and spends money in Italy, hoping that we will benefit from the “Chinese miracle”, ignoring that we will eventually become the first victims.

Overall, there are more than 300 Italian companies owned by Chinese investors (a number that will rapidly increase), and among the lasts and more rumored there is Pirelli, acquired by ChemChina.

However, it is worth to highlight that this phenomenon can also generate positive outcomes. In fact, these companies employ more than 17,000 workers and contribute with almost 9bn to our GDP. That is, significant investments from foreign investors can be also considered favorably, especially if we consider the Italian economic scenario.

Nevertheless, the real issue is that our destiny does not seem to be in our hands. China is moving forward thanks to a technology leadership and to the new skilled and motivated young generation, coming to West to learn and do better.

While, we are still waiting (and hoping) for that rich Chinese man to come back to our shop.