The reason why Manhattan's Little Italy is becoming more Chinese is because Manhattan's Chinatown is slowly pushing north from Canal Street at the expense of Little Italy (and many of the original inhabitants either died or moved out); Canal Street was the traditional boundary between Chinatown and Little Italy; nowadays, the boundary between Chinatown and Little Italy is less clear, though it is consistently north of Canal Street, sometimes even at Hester Street, one block north of Canal Street.
The northeast corner of Canal and Baxter in Manhattan; it is odd that the flag of Quebec is prominent in that image
At the northwest corner of Canal and Mulberry, the boundary between the two neighbourhoods blur completely; sometimes, even Chinese businesses show up between Italian businesses and yes, many Italian businesses rely on Chinese clientele for survival, such as Avari Beauty (note its second sign using Chinese characters) and Little Italy Discount Corner (most of its merchandise are made in China, not Italy, ironically enough).
Centre Street in Manhattan passes through both neighbourhoods as well (and yes, that street is spelled "Centre" despite all other uses having "Center" being the correct spelling there; the sentence "The World Trade Center and Centre Street are a walking distance from each other" is correctly spelled in all varieties of English)
Toronto's Little Italy is becoming more Portuguese even; it is one block north of Little Portugal for a few blocks and there are no shortage of Asian businesses even, since finding Chinese characters on a storefront in Toronto's Little Italy is not difficult at all.
Unlike Manhattan, Toronto's Little Italy and Chinatown are kept apart from each other by Kensington Market (though almost half of the people who live in Kensington Market are ethnically Chinese).