As Europe Grapples With Economic Ties to Communist China, Italy Opts To Break Away From ‘Belt and Road’

With European leaders at odds over their relations with Communist China, Prime Minister Meloni of Italy is stirring the pot by breaking away from her predecessor’s reliance on Beijing. Italy intends to leave the “atrocious” Chinese global infrastructure program known as the Belt and Road Initiative before the end of the year, the Italian defense minister, Guido Crosetto, said in an interview. He added that the drastic move would be accomplished “without doing damage” to Rome’s relationship with Beijing. Communist China is a competitor, he said, “but it is also a partner.”It may be possible for Italy to have good relations with Communist China after leaving the BRI, the director of the School of Oriental and African Studies China Institute at the University of London, Steve Tsang, tells the Sun. Considering Italy is a “major EU country,” and Beijing is aiming to keep the bloc from aligning closely with Washington against Beijing, “it would be extremely unwise for Beijing to overtly punish Italy,” Mr. Tsang says. Yet, Beijing’s reaction is difficult to predict. Italy signed on to the BRI in 2019 under the populist prime minister, Giuseppe Conte. It was the only member of the Group of Seven leading economies to become part of the deal. The news sent shockwaves through the bloc. Unless Italy ratifies its exit of the agreement, it will be automatically renewed in March 2024.“I was against [signing the deal] in 2019 because it made no sense,” a former deputy minister of foreign affairs of Italy between 2018 and 2019, Guglielmo Picchi, tells the Sun. The former politician adds that he is not expecting “any real tension” after Italy’s exit from the initiative, as Rome did not receive any benefits from it. “It was just Chinese propaganda without meaningful trade or political implications,” Mr. Picchi says. Since the signing of the agreement, the Beijing program has had little impact on Italy. Exports to Communist China rose to $18.1 billion last year from $14.1 billion in 2019, according to Italian data. Yet Beijing’s exports to Rome rose to $62.7 billion last year from $34.5 billion in 2019.While Italy is the only G7 member to be part of Belt and Road, “it is not the European or Western country with the strongest economic relations and trade flows with China,” Ms. Meloni said during an interview in May. The Netherlands, Germany, and France were the three largest exporters to Beijing in 2022, according to government website Statistics Explained. The three largest importers from Communist China were the Netherlands, Germany, and Italy, according to the website. Geopolitical tensions are one of the reasons Italy must leave the initiative, a policy analyst at the European Policy Centre, Philipp Lausberg, tells the Sun. “The Belt and Road initiative is more and more seen as a Trojan horse for Beijing’s geopolitical interests,” Mr. Lausberg says. This has become more evident in light of the rising tension with Taiwan and Communist China’s support of Russia in its Ukraine invasion, he adds. Days before Rome officials reiterated their intentions to not renew the initiative, the president of the European Commission, Ursula von der Leyen, asked the leaders of the bloc to find ways to de-risk themselves from Communist China but still maintain trade alliances in areas such as climate change. Recent events exposed “inherent vulnerabilities of our economies and have opened our eyes to the increasingly complex risks to national security and economic resilience,” Ms. von der Leyen told reporters in Brussels. “The world has become more contested and geopolitical and there is a limited set of key technologies that can be used in a different and in aggressive way,” she added. Finding the correct balance between de-risking and maintaining cooperation deals is “the million euro question,” Prime Minister Karins of Latvia told Reuters during the European Union’s summit. “What it basically says is to assess if we are overly dependent in some way on China in trade and how to reduce so that if something changes drastically in the world, we’re not left high and dry,” he added.Communist China was the European Union’s largest partner for imports of goods in 2022 and the third key ally for EU exports, according to Statistics Explained. The bloc relies on Beijing for telecommunications-related equipment, automatic data processing machines, and electric power machinery, among others. Italy’s peers in Europe don’t appear to agree on the need to reduce dependence on Communist China. France wants better and more balanced access to Chinese markets, the French economy minister, Bruno Le Maire, said on Sunday after talks at Beijing during the weekend. “First of all, we are totally opposed to the idea of decoupling. Decoupling is an illusion. There is no possibility of having any kind of decoupling between the American, European, and Chinese economies,” Mr. Le Maire said.In the case of Germany, the aim is not to “decouple” from Communist China, but to reduce the risks as much as they can, the foreign minister, Annalena Baerbock, said at the Mercator Institute for China Studies think tank at Berlin last month. “For Germany, China remains a partner, competitor, and systemic rival,” Ms. Baerbock said. “In the last few years, however, the systemic rival aspect has come more and more to the fore.” She added that Beijing has “changed” so as a result, they must change their policies toward the country.

As Europe Grapples With Economic Ties to Communist China, Italy Opts To Break Away From ‘Belt and Road’

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