Published on Bloomberg
On August 12, 2025
Giorgia Meloni’s government is considering plans to curb Chinese investors’ holdings at key companies to avoid potential tensions with the US.
Italy’s efforts would involve firms that are considered strategic, both privately held and state-controlled, according to people familiar with the matter.
Tiremaker Pirelli & C. SpA, where China’s state-owned Sinochem International Corp. has a 37% holding, is one of the most notable examples of Meloni’s government strategy, said the people, who spoke on the condition of anonymity.
The supplier of tires to Formula 1 auto racing teams has been the subject of a potential sales restriction in the US due to its Chinese ownership, Bloomberg reported earlier, and has sought to curtail the governance role of the investor.
While Sinochem has said its stake in the tiremaker is a long-term investment, Rome is evaluating options that would pressure the Asian investor to sell, the people said.
The Pirelli case is a telling example of the challenges Europe faces as it navigates a new geopolitical landscape. The region, which enthusiastically welcomed Chinese investors in the aftermath of the financial crisis in 2008, is now struggling to de-risk away from China as it tries to protect critical sectors and also stay on the right side of US President Donald Trump.
“Since Trump’s election and the growing unpredictability in transatlantic relations, many EU capitals have begun to reconsider China’s role as a trade partner,” said Beniamino Irdi, a former government official and the head of Highground, an Italian political risk consultancy. “But the balancing act is increasingly precarious.”
Pirelli is just the most extreme of the cases before the Italian government, which would also like to oust Chinese investors from CDP Reti SpA, according to other people familiar with the matter. The firm, with controlling stakes in Italy’s energy grids, is 35% owned by a unit of State Grid Corporation of China, which has two board directors who can influence decision-making, the people said.
Another is Ansaldo Energia SpA, one of the world’s biggest producers of power plants. Even if Shanghai Electric has already cut its stake from 40% to 0.5%, the Chinese presence is still blocking it from taking part in some power bids and tenders in the US, a person familiar with the matter said.
There are about 700 Italian companies with Chinese investors, but the government’s attention is focused primarily on large entities in strategic sectors like energy, transport, technology, and finance.
The Italian government, Pirelli, CDP Reti and Ansaldo Energia declined to comment, as did an Italy-based representative for Sinochem.
A spokesperson for Chinese Ministry of Foreign Affairs said that China-Italy investment cooperation is mutually beneficial and should not be interfered with by a third party.
“The Chinese government has always supported Chinese enterprises in international cooperation on the basis of market-based principles, and hopes that Italy will provide a fair, just and non-discriminatory business environment for Chinese enterprises and effectively safeguard their legitimate rights and interests,” the spokesperson said.
Belt and Road
Washington has warned Pirelli that its tires carrying cyber sensors could be restricted in the US — a key market — as the country cracks down on software and hardware from Chinese-controlled companies in connected vehicles, fearing data harvesting.
The Italian government has already resorted to its so-called golden power rule, a legal instrument that allows it to set restrictions on assets deemed strategic. In 2023, it used the mechanism to curb Sinochem’s influence at Pirelli “with provisions” to protect technology like the cyber sensors. Then, in April this year, at the request of Italian regulators, Pirelli’s board downgraded Sinochem’s governance status, declaring that the Chinese conglomerate no longer has control over the tiremaker.
Chinese diplomats have warned that trade relations may be hit if there is no consensual agreement on Pirelli, said people with knowledge of those interactions. China is one of Italy’s biggest trading partners.
Officials in Rome are concerned about relations with China, just a year after Meloni traveled there to smooth things over following Italy’s decision to exit President Xi Jinping’s flagship Belt and Road Initiative, the people said. Italy had been the sole NATO member to join the partnership, angering the US.
Although Italy left the initiative in 2023, it took Rome months of work to mend ties, a process culminating with a visit by Meloni last summer that Chinese state media deemed a success.
Meloni’s efforts to walk a fine line between Washington and Beijing come as Europe seeks Chinese investment, especially in green-shoot ventures, as a foil against Trump’s tariffs.
The region is, however, being more selective, steering Chinese investments away from critical infrastructure like ports and power grids and toward projects like electric vehicle battery plants that can create jobs and bolster local economies. Once open to investments like the ones in Portuguese utility EDP SA and Greece’s Piraeus Port, European capitals are now wary of Chinese involvement undermining national security and also their relations with Washington.
New investments slowed markedly after 2019 as the European Union turned cautious in the face of an increasingly aggressive China. In the five years to 2025, the EU’s trade deficit with China is set to double, surpassing €400 billion ($466 billion), driven by a wave of subsidized exports in strategic sectors like EVs, batteries, renewables, and chemicals, said Highground’s Irdi.
“It’s an asymmetric shock, accelerating China’s self-sufficiency while eroding Europe’s industrial base” he said, adding that without some concerted, common action, the region “will continue to drift, divided and reactive.”
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