China’s Belt & Road Reaches Europe
On March 23, in Rome, a ceremony was held where Italy’s Prime Minister, Giuseppe Conte, and the Chinese President, Xi Jinping, signed a non-binding memorandum of understanding (MoU) that will most likely lead to Italy’s participation in China’s Belt and Road initiative (BRI).
The event is important as the country is the first among the G7 countries to decide to take part in the Chinese project which seeks cross-continental connectivity and integration between China and Europe. Many in the West even believe that, unlike Russian Eurasianism, Chinese Eurasianism will eventually challenge what we may provisionally call Atlanticism: a situation in which the US has built a security umbrella across the entire Eurasian landmass to prevent the emergence of a unified Eurasia.
For weeks before Italy's decision, Rome was being cautioned by its partners that by getting control of critical technologies and infrastructure, China could pose an economic and political threat to the European Union. But Rome pressed ahead with its support for the scheme, playing down these reservations.
Chinese and Italian firms signed numerous deals, some worth up to an estimated €20 billion ($22.6 billion) in the energy, steel and gas pipeline sectors. The Italian media mentioned a figure of an estimated €5 billion.
A major reason for Italy joining the BRI is that the country has been experiencing economic troubles of late. The country slipped into recession at the end of 2018- its national debt levels are among the highest in the Eurozone. Italy's populist government came to power in June 2018 with high-spending plans but had to peg them back after a stand-off with the EU.
Therefore, from the Italian perspective, the deals with China could see increased exports to the Asian giant in order to correct its trade imbalances and give a boost to Italian businesses and the economy.
Yet another reason is that so far, the EU has not come with a unified strategy towards China and its BRI. At the same time, France and Germany have more Chinese investments than Italy, causing fears in Rome that the country might be left out from good economic opportunities.
Having Italy on board is a success for China and its economic interests in the Mediterranean basin, but it also comes at a time when Beijing has been increasingly seeing European and the Americans coming out against Chinese moves. Washington has been engaged in a global campaign to warn and stop countries from using Chinese G5 wireless devices for security reasons. Some agreed, some not.
On a more serious note, the EU has also voiced concerns that Chinese construction projects use unfair business practices. For example, Europe is worried that most Chinese companies are backed by the central government in Beijing. There have also been cases when foreign firms were asked/forced to give up trade secrets if they wanted to do business in China.
Moreover, just days before the China-Italy deals, the EU announced it was preparing its own strategy to counter Beijing's influence.
Some analysts believe that China's success with Italy is short-lived, that it will not have a geopolitical influence. However, the agreements signed in Rome show that the BRI is still popular and is now reaching the West.
The China-Italy precedent fits into the nascent Chinese Eurasianism which will allow Beijing to gain additional foreign policy tools to use against its potential rivals. China’s pivot to the West goes primarily through Central Asia, a region militarily dominated by Russia.
At present, as seen, the US is struggling to prevent China from increasing its influence in the region and will have to dedicate more economic and military resources if it wants to counter the Chinese.
By Emil Avdaliani
Photo: Chinese President XI Jinping and Italian Prime Minister Giuseppe Conte signed 29 memoranda of understanding worth an estimated 5-7 bln Euros. Source: Photo: AFP