Italian eyes turn to China in anticipation of Brexit

Ruperd Reid Published: 2017-04-25 14:03:06
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[Photo: IC]

[Photo: IC]

Concerns are growing in Italy about the impact of Brexit on exports to the UK. However there's also hope that rising demand in China could solve the problem.

Even if they won't openly admit it, even if they don't realise it, most Brits have a love affair with Italy in some way or another.

The three 'P's of Pizza, Prosecco and Prosciutto aren't just fashionable, they've become so commonplace that they've pretty much been adopted into British culinary culture - and that's just food!

Demand in Great Britain for all things Italian is so great that, in 2016, the UK was the largest single market for exports from the country.

In total, the UK imported a whopping 22.5 billion euros worth of Italian goods.

Although this is a record total, there are clouds on the horizon.

Brexit is widely expected to increase the cost of trade between European countries and the UK. Whilst I've painted a picture of an enduring popularity of Italian exports in the UK that could overcome a price rise, recent history suggests that isn't the case.

During the recession of 2009, the level of trade between Italy and the UK fell sharply. There's no proof that Brexit will bring a recession - but it has already brought higher prices for imported goods in the form of currency fluctuations, and trade barriers would raise these further.

Alongside inflationary pressure, many analysts predict that Brexit will make Britons poorer, at least in the short to medium term. Combine these factors, and you have a worrying situation for Italian producers.

So where does China come into all of this? Well, at present, China is an important market for Italian exports (particularly of designer and luxury goods). There is huge potential for Italian exports to grow here - with China's growing middle class and wealth seeming like an ideal market for the fantastic produce of Italy.

Perhaps, then, the UK's loss will be China's gain? Either way, the popularity of Italian produce looks set to remain strong.

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