Italy hassigned up for China’s multibillion-dollar “Belt and Road Initiative”, becomingthe first Western European nation to jump on board despite scepticism from itsEU counterparts and Washington.
ItalianPrime Minister Giuseppe Conte and Chinese President Xi Jinping witnessed thesigning of a memorandum of understanding on Beijing’s trade and infrastructurescheme on Saturday in Rome.
Among the 29other agreements signed were two port management deals between ChinaCommunications Construction and the ports of Trieste, situated in the northernAdriatic Sea, and Genoa, Italy’s biggest seaport.
While Genoais a long-established port, Trieste has the most potential for China, Italiangovernment sources earlier told the South China Morning Post.
The port isstrategically important for China because it offers a link from theMediterranean to landlocked countries such as Austria, Hungary, the CzechRepublic, Slovakia and Serbia, all of which are markets Beijing hopes to reachthrough its belt and road programme.
Other dealssigned cover areas including satellites, e-commerce, agriculture, beef and porkimports, media, culture, banking, natural gas and steel. The two countries alsoagreed to boost cooperation on innovation and science, increase bilateral tradeand set up a finance ministers’ dialogue mechanism.
Althoughfull details of the contracts were not given, a government source told Reutersthe deals could be worth up to €20 billion (US$22.64 billion). The value wasestimated at around €5 billion by Italian media.
In a jointcommunique released through Chinese state broadcaster CCTV after the signingceremony, China and Italy said they were willing to “deepen cooperation onports, logistics and maritime cooperation” and “work under the foundation ofthe AIIB”, the Beijing-led Asian Infrastructure Investment Bank.
“Both sideswelcome the signing of the [Belt and Road Initiative] MOU … [after] realisingthe great potential the BRI has in advancing interconnections,” the statementsaid.
Italy is nowthe first Group of Seven nation – and the first founding European Union member– to sign up to the trade initiative that the US and EU have characterised as a“debt trap” or neocolonial project.
While nodetails were given as to how the ports would be managed, European nations havebeen critical of Chinese investments in the region amid concerns they could beused for naval deployments. Chinese warships have paid visits to Piraeus port,Greece’s largest seaport that is majority-owned by China’s Cosco Shipping.
FrenchPresident Emmanuel Macron, who will meet Xi in Paris next week, said on Fridayafter an EU summit in Brussels that letting Chinese companies buy up Europeaninfrastructure such as ports had been a “strategic error”.
Washingtonhad meanwhile warned Rome against joining the belt and road scheme, calling ita Chinese “vanity project”, after the plan was revealed in early March.
But theItalian government, grappling with the country’s third recession in a decade,was keen to boost trade and try to revive the economy through the deal withChina.
Facingpressure from Washington and the EU, which has called China a “systemiccompetitor”, Italy had, however, watered down the memorandum of understandingwith China, removing references to data sharing, 5G telecoms networks andstrategic infrastructure, Politico reported. Washington has pressed its alliesto ban Chinese tech giant Huawei Technologies from developing their 5Gnetworks.
After Xi metItalian President Sergio Mattarella on Friday, Mattarella tried to addressconcerns that China would be the only winner from Italy’s involvement in theprogramme.
“The NewSilk Road must be a two-way street to share not only goods but also talent,ideas, knowledge, forward-looking solutions to common problems and projects forthe future,” Mattarella said.
Xi is on asix-day trip to Europe – including stops in Monaco and France – as he tries toease concerns about Chinese investment in the region. He will meet Macron inParis on Tuesday, and in a surprise move Macron asked German Chancellor AngelaMerkel and European Commission President Jean-Claude Juncker to join themeeting, apparently to step up pressure on China.
The EU hasbeen reviewing its China policy and last week proposed “10 actions” to itsmember states, including requiring reciprocity in market access and investment,and raising awareness of national security risks “posed by foreign investmentin critical assets, technologies and infrastructure”.
“China todayfor us is a competitor, a partner, a rival,” Juncker said on Friday, after asummit with EU leaders in Brussels. “We can’t construct something stable on thebasis of persistent imbalances.”