China

Italy Exits Belt and Road Initiative, Citing Minimal Benefits

 

Italy has officially told China that it is pulling out the Belt and Road Initiative (BRI), following a four-year membership in which Beijing was seen as the major beneficiary. 

Italy in 2019 became the first and so far only major Western nation to join the trade and investment programme, ignoring warnings from the United States that it might let China take control of sensitive technologies and vital infrastructure.

However, when Prime Minister Giorgia Meloni took office last year, she said she wanted to withdraw from the deal, which was championed by President Xi Jinping, saying it had brought no significant gains to Italy.

 

Also on AF: December Highs Take India’s Market Cap to Record $4.2 Trillion

 

The 2019 accord expires in March 2024 and an Italian government source said Rome had sent Beijing a letter “in recent days” informing China that it would not be renewing the pact. There was no immediate comment from China.

“We have every intention of maintaining excellent relations with China even if we are no longer part of the Belt and Road Initiative,” a second government source said.

“Other G7 nations have closer relations with China than we do, despite the fact they were never in [the BRI],” he added. Italy will assume the presidency of the G7 in 2024.

More than 100 countries have signed agreements with China to cooperate on BRI infrastructure and building projects since the scheme was launched in 2013. 

The then Italian Prime Minister Giuseppe Conte hoped for a trade bonanza when he signed up in 2019, but Chinese firms seemed to be the main beneficiaries.

Italian exports to China totalled 16.4 billion euros ($17.7 billion) last year from 13 billion euros in 2019. By contrast, Chinese exports to Italy rose to 57.5 billion from 31.7 billion over the same period, according to Italian data.

 

Silk Road Link

Italy’s main euro zone trading partners France and Germany exported significantly more to China last year, despite not being part of the BRI, which is modelled on the old Silk Road that linked China to the West.

Looking to maintain strategic ties, Foreign Minister Antonio Tajani visited Beijing in September and President Sergio Mattarella is due to visit China at some stage next year.

Meloni herself has said she wants to go to Beijing, but no date has been fixed.

Despite being part of the BRI, successive governments in Rome signalled their doubts about the pact by vetoing some proposed takeovers or limiting the sway of Chinese companies over their Italian counterparts.

In June, Meloni’s cabinet curbed the influence of Chinese shareholder Sinochem on Italian tyremaker Pirelli, using “golden power” rules designed to protect strategic assets.

Meloni, who heads a conservative coalition, has been keen to burnish her credentials as a committed pro-NATO leader and a government source said that she had assured US President Joe Biden earlier this year that Italy would quit the BRI.

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

Italy Says Belt And Road Deal Benefits Short of Expectations

‘Atrocious’ Move to Join China BRI Didn’t Help Italy: Minister

Italy Restricts Chinese Influence on Pirelli Over Key Data Tech

Italy Blocks Technology Transfer to China

 

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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