By Rosie Goldsmith
BBC Radio 4's Crossing Continents
Chinese workers pull trolleys through the streets of Milan
In cities across Italy tension between the Chinese and Italians is high. The rapid influx of Chinese migrant workers and their dramatic impact on the labour market have caught Italy off guard - particularly in the northern industrial heartland.
Prato, Italy's main textile manufacturing city, is at the heart of a culture clash which is transforming the way the textile industry operates.
Chinese migrants have been pouring into Prato to work in the city's thousands of factories, warehouses and sweatshops that supply the cloth and yarns to the Italian fashion industry.
Today Prato has the largest Chinese community in the country - about 25,000 people, nearly 15% of the city's population.
And the authorities are worried.
"Many of the Chinese here are 'clandestini' - illegal. We have big difficulties catching them. And since they arrived, crime in the city has risen," says Francesco Nannucci, the head of investigations at the Prato police.
Milan's Chinatown holds examples of the merging cultures
The police patrol Prato's Chinatown every day - an area full of Chinese shops, services and restaurants. Nearly all of them have sprung up in the last few years.
On one raid, ten undocumented Chinese workers were discovered in a side-street sweatshop, machine-sewing clothes.
There was a child present, beds, a bathroom and a kitchen. They slept, cooked, worked and brought up their children in this small warehouse.
Up to a third of Italy's Chinese immigrants could be illegal.
A Chinese factory worker in the Giupel textile factory
But it's not only that fact preoccupying the authorities: it is how they work.
They are transforming the way the textile industry in Italy operates and bringing globalisation to a reluctant Italian market.
In the industrial zones on the edges of Prato, thousands of Chinese are employed in the city's factories and warehouses - many of them now owned by Chinese bosses.
Most of them come from one city in China, Wenzhou, in the province of Zhejiang, just south of Shanghai - also a textile manufacturing region.
They come to Italy in one of two ways: by being smuggled here by criminal gangs or by arriving as tourists and overstaying their visas.
Prato - along with Rome, Naples and Milan - are the target cities.
It's where the work is and where there are established Chinese networks to absorb newcomers.
"My whole family is here: my uncle, aunt, mother, father and sister," 18-year-old Cheng explains, standing amongst racks of thousands of T-shirts, skirts, trousers and dresses.
"We work very hard," he boasts. "Sometimes day and night!"
In the workshop at the back of the warehouse Cheng and his family toil away to produce these clothes in as short a time as possible, as cheaply as possible.
They can undercut the prices - and the wages - of their Italian counterparts. They may be paid as little as 2 euros an hour (£1.50), and 20 dresses might be produced for only 150 euros wholesale.
The clothes are bought by sellers from all over Italy and the rest of Europe.
Prato has become a main distribution centre for what is called "Pronto Moda" or "fast fashion".
This is a Chinese invention: ' made in Italy' goods produced under Chinese conditions.
Prato has also become a centre for the import of cheap clothing from China itself.
Over the last decade Italy has suffered some hard economic knocks.
In Prato one-tenth of its traditional companies have folded and one in ten workers have lost their jobs.
The Mayor of Prato, Marco Romagnoli, is worried.
"The Chinese are such a strong, close-knit community and our two cultures are very different. Many Italians blame them for economic problems. And as the Chinese get richer they are buying up large chunks of our textile sector - using their ties with China to become even more powerful."
Business leaders blame Italy's high labour costs, the strong euro and weak dollar, for a dramatic drop in exports and productivity.
But they also blame the Chinese migrants flooding into Italy's factories.
"Everybody underestimated the impact of this. Socially it's a disaster. The Chinese don't mix with us or speak the language. It's been a shock," says Carlo Longo, an Italian yarn entrepreneur and chairman of the Confederation of Industrialists in Prato.
"We have to allocate a lot of resources for the Chinese in the city. And many of them work 'black' - they don't pay taxes or contribute to the costs of the city. My colleagues resent having to stick to the rules when the Chinese don't."
"What happens in Prato," he adds, "is a yardstick for all Italy. I fear that what happened in Milan could happen here in Prato."
In April this year violent clashes took place in Milan's Chinatown between the Chinese clothing merchants there and the Italian residents and police.
Designer clothing shops adorns the Galleria Milan
This is the first time there'd been clashes like this in Italy and they set the country on edge.
Daniele Cologna, a Milanese academic and expert on the Chinese in Italy, explains why tensions are growing.
"The Chinese are now much more visible in Italy. They are opening up more of their own businesses. They want to be successful and earn well. And they are benefiting from China's new global status.
"The Italians feel threatened by them."
But there are some positive signs of how cultural harmony can be created out of a culture clash.
The textile company "Giupel" is famous in Prato for its Chinese boss - 42 year old Xu Qui Lin, who likes to be called "Signor Giulini".
He emigrated to Italy in 1990, started off as a waiter in Florence, became a textile worker in Prato, then bought his own company in Prato in 2000.
He's respected for paying his taxes and sticking to the rules - something he tries to encourage the other Chinese in Prato to do.
"I developed a model which other businesses are now copying: I employ both Italians and Chinese and they work together."
"I also employ 300 Chinese in my factory back in China. That way I keep costs down. And I concentrate on quality," he says proudly.
This summer Italy's economy also showed some positive signs. Its fashion and textile entrepreneurs were rewarded with their first good news in years: sales are up 3% over the year, and orders are up by 31%..
The industry has had a tough lesson to learn.
To succeed it must embrace China, restructure, innovate, downsize and outsource - but also stick to Italian quality and craftsmanship.
"Made in Italy" but sometimes "Made in Italy by Chinese".
BBC Radio 4's Crossing Continents is broadcast on Thursday, 2 August 2007 at 1102 BST and repeated on Monday, 6 August 2007 at 2030 BST.