The Chinese trojan horse also known as the Chinese Silk Road has landed in Italy. It has since sparked controversy inside and outside the Mediterranean country. The “New Silk Road” is the term for a trade corridor Chinese President Xi Jinping first proposed in 2013. The grand design also goes by the name of The Belt and Road Initiative (BRI); it is a “belt” of overland corridors and a “road” of shipping lanes.
The Belt and Road Initiative consists of a vast network of railways, pipelines, highways, and ports that would extend west through the mountainous former Soviet republics and south to Pakistan, India, and Southeast Asia.
In other words, it covers a multitude of investment projects with the intent of promoting the flow of goods, investments, and people.
So far over 60 countries have either signed onto BRI or say they intend to do so. China is looking to add the G7 countries in its basket. The first target is Italy.
A double-edged sword is now in the hands of the “Bel Paese”.
The Belt and Road Initiative: Common Interests
Italy is wrestling with its worst economic crisis since World War II and is looking for more beneficial relations. It has lost 4.3 trillion euro since it joined the EU, while Germany has gained 1.9 trillion euro. Research last year by the European Parliament found that 45 percent of the Italian people believed Italy had not benefited from its membership in the union. This is even higher than recession-ravaged Greece or a Britain that voted for Brexit.
To revitalize its economy, Italy welcomed the deal and is looking at their common interests:
The equation is very simple, Italy needs the money and China has it. Neither the U.S. nor the EU is willing to make that type of investment. Italy, therefore, believes that joining the BRI will help the country’s economy on many different levels.
Currently, the country’s infrastructure investment is still 40% below pre-crisis levels; China could certainly assist them with this. After all, the presence of a strong investment partner brings new opportunities, more money, and a bigger scope for action.
Italy also aims to boost the exports and wants to catch up with its neighbors; Germany exported 93.8 billion Euros of goods to China in 2018, with Britain next on the list exporting 23.4 billion Euros, France third with 20.8 billion Euros and Italy fourth on 13.17 billion Euros.
The Belt and Road Initiative is also a way of enhancing the “Made in Italy” label. It will increase trade, especially in the form of exports to China. It particularly helps Italy promotes its luxury goods to China’s growing middle class.
But there’s no such thing as a free lunch for Italy; it has to be a win-win situation.
China will receive easy gateways into Europe’s richest markets. Moreover, the fact that Italy is joining the BRI initiative is a nice feather in China’s cap. In other words, it is not only about investments, but it also has symbolic importance for China.
When Something Is Free, You’re the One for Sale
In Italy, not everyone is in favor of the Belt and Road Initiative. Matteo Salvini, whose slogan is “Italy first”, has an Atlanticist outlook and wants to protect traditional Italian markets.
He believes the BRI risks “turning Italy into a Chinese colony” and will saddle it with more debt.
“Before allowing someone to invest in the ports of Trieste or Genoa, I would think about it not once but a hundred times…” warned Salvini, who refused to meet with President Xi.
The “Made in Italy” label has always rhymed with “Luxury produced”. It has a good reputation worldwide. Chinese factories based in Italy using Chinese labor can challenge this reputation and quality. Brussels and Berlin were also not very pleased, they are afraid that Rome might break the European position on China. Likewise, the U.S. voiced its discontentment with Italy’s decision to be part of the Belt and Road Initiative.
“We view BRI as a made by China, for China initiative. We are skeptical that the Italian government’s endorsement will bring any sustained economic benefits to the Italian people, it may end up harming Italy’s global reputation in the long run.”, the White House National Security Council spokesman declared to Financial Times.
Italy is a major global economy and a great investment destination. Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people.
— NSC (@WHNSC) March 9, 2019
The U.S. has warned Italy of the debt-trap diplomacy that they believe China has used across the world since 2013. Many fear that this will only grow China’s influence. For now, only time will tell if the Belt and Road Initiative will help Italy’s economy or simply give China more money.