Do I need visa to China? I hold Indian passport and have long permission of stay in Italy.

Yes, you need to apply for a China visa in advance. If you live in Italy with long permission, you can submit your visa application to Chinese consulate there, over your area of residence. If in Milan or Rome, you are required to apply through CVASC. Read https://www.travelchinaguide.com/embassy/italy.htm for more details.