New Silk Road: Will Italy be China's Trojan horse?
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To the dismay of some, Italy is due to become officially the first G7 country to support China’s controversial $1-trillion Belt and Road trade infrastructure programme on Friday when Chinese leader Xi Jinping visits Rome.
Do Giuseppe Conte and Marco Polo have more in common than you might expect? Two millennia after the Silk Road forged lucrative trade links from Venice to China, Italy’s prime minister is set to lend his official backing for the so-called New Silk Road during President Xi’s visit to the Italian capital.
Italy is the first of the seven top Western economic powers to lend its weight to the Chinese initiative. “It’s a strong diplomatic gesture that is, above all, symbolic,” Jean-François Dufour, who heads the Paris-based DCA Chine-Analyse consulting firm, told France 24. “There is no organisation in charge of the silk road that Rome could adhere to,” he says. Still, Rome is poised to conclude a series of commercial deals that will make that diplomatic rapprochement concrete.
Saving the Port of Trieste
Italy’s expected support has evidently irritated Washington as it wages a trade war with Beijing. The United States has warned Rome against lending “legitimacy to China’s infrastructure vanity project”.
But Italy believes the New Silk Road could bring its economy out of the doldrums after it tipped into recession at the end of last year. Rome is betting that its “official support will make the country Europe’s top destination for highly coveted investment from China”, says Dufour. Indeed, he explains, the Port of Trieste should in the short term be one of the main beneficiaries of the rapprochement. “It’s a port that has been in economic decline for years. Rome thinks that China could revitalise it along the same lines as the Greek port of Piraeus, which saw its activity grow fivefold after China bought it,” the French economist notes.
For Beijing, Italy represents a new step in its ambitious investment programme, which aims above all “to offer Chinese firms foreign markets to compensate for a business slowdown in China,” Dufour says. As such, China is keen to cooperate with Leonardo, an Italian high-tech firm that specialises in aerospace, security and defence. Beijing could also make the most of good relations with Rome to make the case for Huawei, its controversial telecom giant, to launch 5G, the next generation of mobile internet technology, in Italy.
Stymying Europe’s anti-China front
But this rapprochement goes beyond economics. With Europe taking a tougher stance on China, the timing is right for Beijing, politically. On March 12, for the first time, the European Commission deemed China a “systemic rival”. Germany until recently looked upon the Asian superpower relatively favourably, but Berlin has since “come over to France’s much more firm position”, Dufour says.
Under the circumstances, official support from Italy, the Eurozone’s third-largest economy, could act to curb the nascent anti-China front. Securing a degree of goodwill, or at least neutrality, from Europe is all the more vital with China-US trade relations on the wane.
“It is true that, politically, Italy could become a Trojan horse for China, because Chinese investment will push Rome to try to temper other European powers’ intransigence toward Beijing,” Dufour says.
Rome, meanwhile, also sees getting closer to China as an astute political move for Italy. Betting on China is a way for Italy’s Eurosceptic leadership to “demonstrate the country’s independence by serving notice to the EU that Italy does not depend on its subsidies”, Dufour notes. It’s a political choice the expert calls “paradoxical” given the fact that “on the more or less long term, Chinese investment will manifest itself in the Italian economy’s dependency on Beijing”.
And in the end, it isn’t clear that Italy will come out on top.
This article has been translated from the original in French.