Italy’s exports to China have tripled in little more than a year. The problem is, even the experts are struggling to explain why.
Shipments abroad rose above 3 billion euros (US$3.3 billion) in February, up 131 percent from a year earlier. This follows another jump of 137 percent the month before.
For comparison, Italy exported about 1 billion euros of goods and services in January last year to the world’s No. 2 economy.
Photo: AP
Such a boom would be hard to explain under normal circumstances. Now, as Russia’s war in Ukraine and supply-chain upheaval distorts traditional trade flows, it is downright mysterious.
First, consider the politics. Italy might be the only G7 country that has signed up to China’s mammoth investment plan, the Belt and Road Initiative, but the economic benefits of such an alliance since 2019 have been limited.
Moreover, relations had already cooled significantly under former Italian prime minister Mario Draghi. His successor, Giorgia Meloni, has signaled to US officials that she would pull out of the controversial China deal before the end of the year.
What makes the data even more puzzling is that it is all down to a specific sector: pharmaceuticals. To be more precise, “medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses.”
Exports of this group of products rose to 1.84 billion euros in February from 98.5 million euros a year earlier. They accounted for almost two-thirds of all Italian exports to China.
Why the spike? Italian media have speculated that the driving force is runaway Chinese demand for ursodeoxycholic acid (UDCA), a chemical used mostly in liver drugs and that has been claimed — without reason — to help prevent COVID-19.
So the sudden end of China’s “zero COVID” strategy and the subsequent wildfire spread of the virus across the country might be behind the export boom, although the vast majority of China’s population appears to have gotten COVID-19 in December last year and January, meaning they would have recovered before Italian exports started rising.
However, UDCA demand alone does not explain the export peak.
Industria Chimica Emiliana Srl, the Italian company that is the world’s largest integrated producer of UDCA and bile acid products, has yearly sales of about 300 million euros, just a fraction of the jump in Italian pharma exports to China.
Adding to the uncertainty, the most recent Chinese data yields little evidence these products are arriving en masse. Considering shipping times, the drugs — whatever kind they are — should have made it to China to be counted in last month’s trade data, but there was no observable change.
One explanation might be shifting regional trade.
“It’s likely demand for medicines from China,” said Peter Ceretti, a director at Eurasia Group who investigated the matter. “Larger Italian pharma producers are shipping as much Italian-made product as they can, and perhaps some are moving German and other European Union-produced medicine into Italy for re-export to China, too.”
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS