Tuesday, September 5, 2023

China touts the benefits of its 'Belt and Road' initiative to Italy, which may end the agreement

China touts the benefits of its 'Belt and Road' initiative to Italy, which may end the agreement

China touts the benefits of its 'Belt and Road' initiative to Italy, which may end the agreement
China touts the benefits of its 'Belt and Road' initiative to Italy, which may end the agreement

BEIJING (AP) — China’s foreign minister is seeking to sell his Italian counterpart on the benefits of leader Xi Jinping’s signature “Belt and Road” initiative of Chinese-built and -funded infrastructure projects, as Rome considers whether to renew the agreement.

In a Monday meeting, Wang Yi told Antonio Tajani that bilateral trade had grown from $50 billion to nearly $80 billion and that Italy’s exports to China increased by around 30% over the past five years.

While the figures haven’t been corroborated, Italy’s conservative government has cast doubt on the benefits of the arrangement.

In 2019, Italy became the only European country to sign on to the initiative under then-premier Giuseppe Conte, and it is not expected to be extended when it comes up for renewal at year’s end.

China's official Xinhua News Agency quoted Wang as telling Tajani that “China and Italy should adhere to the right way of getting along with each other" with mutual respect and trust in the face of geopolitical disturbances and that China was ready to push for steady development of China-Italy relations.

The Italian news agency ANSA quoted Tajani as saying that, “Italy is the supporter of dialogue with Beijing at the European Union level too, and of frank, open dialogue on principles and rights.”

China touts the “Belt and Road” initiative, known as the BRI, as successfully raising infrastructure in underdeveloped nations. Critics say BRI built vanity projects in countries that needed poverty eradication and basic services, while the local governments were left with huge debts owed to Chinese state banks under contracts shrouded in secrecy.

Italy has buyer’s remorse over China’s Belt and Road
Italian Prime Minister Giorgia Meloni gestures during the handover ceremony with outgoing Premier Mario Draghi in Rome on Oct. 23, 2022. Meloni is Italy’s first female prime minister and leads the conservative Brothers of Italy party.

Just three days after Italian Prime Minister Giorgia Meloni met with President Joe Biden at the White House, Italy’s defense minister Guido Crosetto stated that the nation’s 2019 decision to join China’s Belt and Road Initiative (BRI) was both “improvised and atrocious.” According to Crosetto, the government of Guiseppe Conte, leader of the populist Five Star Movement, had signed on to the arrangement expecting to increase Italian exports to China. Instead, Crosetto asserted, the arrangement “led to a double negative result. We exported a load of oranges to China, they tripled exports to Italy in three years.”

Even before Crosetto issued his remarks, it was clear that Rome was developing cold feet over its participation in the BRI. For its part, China was concerned that during Meloni’s Washington visit she would make an announcement regarding Italy’s future participation in its primary international initiative. Both Chinese media and government spokesmen warned of what China’s ambassador to Italy, Jia Guide, termed the “negative impacts” of Italian withdrawal.

In the end, Meloni’s joint statement with Biden did not mention Italy’s possible withdrawal from the BRI. But the statement did note that the two leaders “reaffirm[ed] their commitment to … strengthening economic resilience and economic security, including efforts … to increase our collective assessment, preparedness, deterrence and response to economic coercion.” The unstated reference is unequivocally to China.

Italy is the only member of the Group of Seven advanced industrial economies to have joined the Chinese initiative. It is also the only major European Union member state to do so; the other seventeen states that signed up to the BRI are all smaller economies. The EU itself has come to view the BRI as a serious challenge, however. As Ursula von der Leyen, president of the European Commission, asserted earlier this year, “the Chinese Communist Party’s clear goal is a systemic change of the international order with China at its center. We have seen it with China’s positions in multilateral bodies which show its determination to promote an alternative vision of the world order.” She added, “We have seen it with the Belt and Road Initiative.”

In 2021, the EU, responding to the effect of the BRI throughout the Global South in particular, created what it dubbed “Global Gateway,” which it described as “the EU’s positive offer to partner countries in support of their resilience and sustainable development.” In announcing its creation, the EU pledged to invest 300 billion euros (about $350 billion) between 2021 and 2027 in projects ranging from fighting climate change to health, energy, transport, infrastructure and digitalization.

The funds that the EU has allocated to its project approximate those that Beijing has dedicated to the BRI, about $370 million. On the other hand, European funding pales in comparison to the more than two trillion dollars that Beijing has poured into overseas construction projects and various forms of investment over the past two decades. Nevertheless, Global Gateway signifies that the EU has at least come to recognize that words alone, no matter how forcefully delivered, will not wean any country off the BRI.

China’s flagging economy, caused in no small part to Xi Jinping’s determination to prop up inefficient state-owned enterprises, is also hurting the BRI and creates a real opportunity for the Global Gateway to serve as a credible alternative to the Chinese effort. While Global Gateway consists of a variety of projects, it highlights the EU’s focus on climate issues — in sharp contrast to China’s role as the world’s leading emitter of greenhouse gases. In that regard, in April the EU Commission announced that it was devoting 18 billion euros (about $20 billion) for investment in what it termed “Global Gateway’s priority areas — climate action, clean energy and connectivity.”

After her meeting with Biden, Meloni said that Italy would decide by December whether to remain in the BRI. Europe’s increasing angst over China, its efforts to counter the BRI with a major initiative of its own, and Crosetto’s remarks about the Chinese initiative certainly point to the direction that Meloni’s decision is likely to take. After four frustrating years, Rome finally appears to be suffering from what can only be termed buyer’s remorse. If the EU can keep expanding its own Global Gateway efforts even as the Chinese economy continues to flounder, perhaps other BRI participants will follow Italy’s lead and consider withdrawing from the so-called “flagship project” that Xi Jinping launched with so much fanfare exactly a decade ago.

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