Friday 22 March 2019

Italy's drive to join China's Belt and Road hits potholes

Xi Jinping
Xi Jinping

Crispian Balmer

The ancient was a network of trading routes that stretched from China to Italy, transporting goods, skills and ideas half way around the world.

Jump forward two millennia and Italy now wants to play a pivotal role in the new Silk Road being created by Chinese President Xi Jinping.

But joining the latest incarnation is proving controversial and risky for Rome.

Prime Minister Giuseppe Conte plans to sign a preliminary accord when Xi visits Rome next week, hooking Italy up to the Belt and Road Initiative (BRI) - a huge, multi-billion euro project designed to improve Beijing's trade reach.

Italy's drive to be the first G7 nation to join the venture has angered Washington and alarmed Brussels, raising fears of a sell-out of sensitive technologies and the handover of critical infrastructure.

With ports that offer easy gateways into Europe's richest markets, Italy is a promising and prestigious prize for China.

In return, Italy's government hopes for a boost in exports and investment that will lift its anaemic economy out of its third recession in a decade.

But diplomatic analysts and political foes say Rome has not weighed the risks, failed to consult with its Western partners and underestimated growing concern about China's global aspirations.

"I am afraid that up until now we have handled this in too amateurish a fashion, without any real coordination," Lucio Caracciolo, director of the influential Limes geopolitical review, said.

"My fear is that in the end we will lose on both counts, getting nothing substantial from China while the United States retaliates against us for having got too close to Beijing."

Deputy Prime Minister Luigi Di Maio, who leads the populist 5-Star Movement, has spearheaded the pro-Beijing policy, setting up a China Task Force within the industry ministry that has the stated aimed of making Italy a "privileged partner" in BRI.

He has visited China twice in eight months and effectively sidelined the foreign ministry on one of the most sensitive diplomatic issues of the day.

Di Maio's task force is led by junior industry minister Michele Geraci, who lived in China for 10 years before entering government in 2018. Mr Geraci speaks Chinese and fervently backs closer ties, saying Italy has fallen behind.

Germany exported €93.8bn of goods to China in 2018, the UK €23.4bn, France €20.8bn and Italy €13.17bn. "There is huge potential there that other countries are already taking advantage of," said Mr Geraci, a former economics professor

But just as Italy adopts its new position, the rest of Europe seems to be having second thoughts.

Earlier this week, the European Commission branded Beijing a "systemic rival" and called on European Union leaders to back its ideas to curb Chinese state-owned enterprises.

Reuters

Irish Independent

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