Italy officially left the Chinese Silk Road

After months of rumors and evaluations that a way would be followed to avoid infuriating China, Italy officially left the Silk Road with a note sent to Beijing recently. The news that Corriere della Sera has been waiting for now removes all doubts about the Italian government’s desire to extend the memorandum of understanding on the Belt and Road Initiative (BRI), which Rome signed with Beijing in 2019 during the yellow-green government. After the expiry of Giuseppe Conte – scheduled for 22 March 2024. However, there was no confirmation from Palazzo Chigi. The manager hides behind “no comment”. The agreement, which is not legally binding, would automatically renew between Italy and China in 2024, and the Italian government would have to submit a written cancellation to exit the agreement. How was it. Prime Minister Giorgia Meloni said, “The final decision regarding Italy’s possible exit from the memorandum will be made by December.

Italy’s exit steps from the Silk Road

This would therefore mean the cancellation of the agreement by the Italian government. Three days ago, Rome, without reporting anything publicly, sent a verbal note to Chinese government officials, in which the manager of Giorgia Meloni committed to restart as much as possible the strategic partnership that has existed for more than a decade, CorSera reported. Between Beijing and Rome. The letter states that the desire to “develop and strengthen bilateral cooperation” between the two countries remains strong. It is not yet known whether this will happen or whether there will be any trade retaliation from China.

The decisive move came after weeks of talks and was preceded by a visit to China in the summer by Farnesina general secretary Riccardo Guariglia, followed by a visit by Foreign Minister Antonio Tajani. During these visits to Beijing, the intention to develop the strategic partnership between the two countries was confirmed and, among other things, preparatory steps were taken for the visit of president Sergio Mattarella to China next year.

Prime Minister Giorgia Meloni therefore kept the promise that brought him to Palazzo Chigi during the election campaign. The Prime Minister has never hidden his desire to exit the agreement, it is no secret for China, but the official announcement has only now come. What does the Italian administration plan to do now? After meeting with Chinese Premier Li Qiang on the sidelines of the G20 in New Delhi last September, Meloni said the “lighthouse” of relations between Rome and Beijing was the 2004 Global Strategic Partnership. It is precisely where the India-Middle East-Europe Economic Corridor (Imec) takes its name, that is, the agreement that presents itself as an alternative to the Chinese New Silk Road project, thanks to the creation of ship-train-ship connections between India, Gulf countries, Israel, the Mediterranean and Europe.

Chinese initiative for Italy was not successful

The agreement “did not produce the desired results”, which was reiterated by Foreign Minister Antonio Tajani, who confirmed that “the Italy-China intergovernmental meeting will be held in Verona next year, where all issues related to international trade will be discussed”. The president of Farnesina thus reassures the markets and investors: “Excellent relations and relations continue despite being one of our competitors on a global level”.

The benefits to Italy were lower than the expectations put forward at the signing of the agreement; so much so that the balance of trade has always been entirely in favor of China. According to data from the Farnesina Economic Observatory, while Italy’s exports stood at 9.7 billion euros in the first half of 2023, imports from China increased twice as much, reaching over 19 billion euros. It’s a sign that trade is unbalanced and favoring the Chinese giant, as it has been since the year Italy entered the Belt and Road (and beyond). Italy’s exports were decreasing in 2019, but increased the following year and then increased from over 12 billion euros to around 16 billion in the last two years. But at the same time, Chinese exports to Italy grew faster. According to Maeci analysis, it increased from 31 billion euros in 2019 to over 57 billion euros in 2022.

Italy’s exit from the Belt and Road, the only G7 member and also a member of NATO, could represent a major defeat for Beijing – both within and outside China’s borders – which has promoted Rome’s membership in the Chinese project as a political success. . But it seems that the secrecy of the agreements is a way to protect both parties.

Ten years after the launch of the Xi Jinping-backed initiative, the BRI is not in good health: Beijing has actually changed its paradigm and favored smaller, more specific investments over massive projects. To protect itself, China is now financing more targeted, high-quality projects with smaller loans and shorter repayment periods. For the country led by Xi, Italy’s departure represents a setback that could affect other governments that have joined the BRI and no longer recognize its benefits.

Source: Today IT