Italy’s Stance on China’s BRI: More than a Struggle against economicdependence

After Germany, Italy has now decided to reduce economic dependence on China.
Italy’s defence minister’s latest remarks on China’s ambitious Belt and Road
Initiativeis a reflection of growing frustration with the initiative’s unmet promises
and the country’s strategic reassessment of China. Defence Minister Guido
Croseto described Italy’s decision to China’s BRI as a bad decision. The defence
minister claimed the initiative had done little to boost Italy’s exports, making
China the only winner. Cresto is part of team working out a strategy to leave BRI

Italy’s decision on BRI came nearly a month after Germany adopted its first
national strategy on China which defined Asian superpower as “a partner,
competitor and systemic rival” and called for a significant reduction of
dependency on Chinese goods while still maintaining economic ties worth
hundreds of billions of dollars.

China’s foreign ministry slammed “some forces” for “hyping up and politicizing”
China and Italy’s cultural and economic exchanges via the Belt and Road Initiative
(BRI). Under the agreement on BRI, the two parties can end the deal after five
years, otherwise the partnership gets extended for another five-year term. Italy
has time until the end of the 2023 to inform China on whether it wants to end
the deal.

The unholy agreement on the controversial BRI initiative was signed in 2019
when Chinese President Xi Jinping’s visited Rome. Italy which had suffered
through three recessions within a decade, was looking to attract investment and
expand Italian exports’ access into China’s huge market. In absence of enough
support from Europe, its populist government looked up to China as the latter
was more than willing to help Italy.

China had its own reasons to count on Italy which is the first major industrialised
nation of the world. The country served as a major terminus along the ancient
Silk Road, and Italy’s inclusion in the BRI helped Xi link his signature foreign policy
initiative to a golden era of Chinese prosperity and influence. Moreso, Italy is
home to the largest Chinese population in Europe, while the countries share
deep trade linkages in the production of fabrics, leather goods, and more.
However, China looked to increase its influence in Europe, drive a wedge in the
EU, and sow divisions between Washington and Brussels, Italy appeared as a
weak point it could press.

But Italy soon realised that the BRI would not meet Italian hopes and
expectations. According to news reports, Since Italy joined the BRI, its exports
to China have increased from 14.5 billion euros( 15.94 trillion US dollars) to
18.5 billion euros ( 20.34 billion US dollars), while Chinese exports to Italy
have grown far more dramatically, from 33.5 billion euros (36.83 billion US
dollars) to 50.9 billion euros( 55.95 billion US dollars). However, institutional
arrangements with China, covering everything from double taxation to
recognition of certain sanitary requirements for pork exports, cultural
property and heritage sites, and minor commercial agreements failed to
fundamentally change the trajectory of Italy-China economic ties.

News reports also indicated that China invested 24 billion US dollars in Italy since
2005, but only 1.83 billion US dollars of that was made following Italy’s decision
to join the BRI. Italy’s experience demonstrated that joining the BRI does not
necessarily confer a country’s special status with China or guarantee it more
trade and investment with China than would occur absent BRI.
The lack of political will to continue with BRI project besides global concerns
were among many reasons behind Italy’s change of heart. For instance,
Nationalist leader Giorgia Meloni clearly announced her preferences before
elections last year. In August 2022, She said that Italy won’t look to limit China’s
economic expansion and continue to support Ukraine militarily if a rightist
alliance wins next month’s election. She also said that under her leadership, Italy
would not be “the weak link” in the Western alliance.Back in 2022 and prior to
being elected, Meloni said that joining the BRI was a “big mistake.” When former
European Central Bank governor Mario Draghi took power in Rome in 2021, he
froze the agreement.

It was not easy for Meloni to take a stand against China asshe leads a coalition
with two other right-wing parties: Lega and Forza Italia. She sided with the U.S.
on the Chinese front. Italy’s critical stance towards the BRI
comes as several African countries, including Sri Lanka, have experienced the
consequences of participating in China’s infrastructure projects.

Meanwhile, analysts said that Italian’s possible withdrawal from the BRI would
reflect the growing transatlantic convergence on the challenge China poses.
European countries increasingly view China as a rival rather than as a partner or
competitor, while President of the European Commission Ursula von der Leyen
recently argued that “the Chinese Communist Party’s clear goal is a systemic
change of the international order with China at its center,” pointing to the BRI as
evidence. Beijing’s support for Russia in its war against Ukraine has led many
European governments, including Italy’s, to shed their illusions about China.
Central and Eastern European countries, which had traditionally sought closer
ties to China through the “17+1” cooperation mechanism, have also made this

Italy’s decision came at a time when the wider European Union is framing a new
relationship with China. The bloc is finding it increasingly hard to strike a united
front toward Beijing, with some nations favouring economic links and others
pushing for a more critical approach.But for many European governments, China
could and should do more to support Ukraine in the wake of Russia’s invasion.
China has failed to condemn Russia’s onslaught of its neighbour and in a visit to
Moscow in March, China’s leader Xi Jinping referred to his Russian counterpart
as a dear friend.On top of that, Beijing has proposed a 12-point peace plan for
the Ukraine war. The plan fails to specify whether Russia needs to leave
Ukrainian territory for a deal to be completed.