Italy signs up to China’s Belt and Road
Italy is the first G7 country to endorse the Silk Road-style global trade network, angering its EU and US allies.
Conte and Xi signed 29 deals, covering cooperation in banking, a partnership between a Chinese construction company and Italian ports and fruit exports to China.
The agreements also pointed to media, science and technology cooperation and promised the return of hundreds of Chinese cultural objects.
Italy gives legitimacy to the Belt and Road Initiative that has been dismissed by the US as a “vanity project”.
The deals threatened to deepen rifts between Italy and its traditional allies and within Italy’s fragmented coalition government.
Deputy Prime Minister Luigi di Maio, also Italy’s minister for economic development, said Rome’s goal was to “rebalance an imbalance” in bilateral trade with China.
“There is a lot of ‘made in China’ coming into Italy and too little ‘made in Italy’ that goes into China,” Di Maio said. Italy hoped for “a substantial and gradual increase of exports” to “balance out the trade imbalances”, the embattled Five-Star Movement leader added.
Italian President Sergio Mattarella also gave his backing to the deal, saying China and Italy were “ideal travel companions” while raising a toast to Xi during a gala dinner at his palace.
Announced in 2013 as a plan to build a “belt” of overland corridors and a “road” of maritime shipping lanes spanning Asia, Africa and Europe.
It now covers digital infrastructure and cultural exchanges.
Belt and Road projects are financed by China’s state-owned enterprises that offer loans and credit, which have left numerous countries crippled by debt, with Sri Lanka one of the most well-known examples.
In 2017, Sri Lanka handed China control of a strategic port after it failed to pay its Chinese creditors.
Morgan Stanley predicted that China’s Belt and Road investment to participating countries could reach US$1.3 trillion by 2027.
China has been accused of “debt-trap diplomacy” and masking military expansion as commercial enterprises.
Italy wants to boost Italian exports to China and seek investment in Italy’s creaking infrastructure.
Rome already has massive public debt and fell into recession at the end of 2018.
“Italy needs investment and resources and China has those to provide,” said Erik Jones at Johns Hopkins University’s school in Bologna.
“Italy also needs to underpin and strengthen its business ties with China. This agreement will help there.”
There has been a backlash against Belt and Road funding because of the dangers of debt traps. Picture credit: Kremlin