Will China take Trieste? What happened to the new silk road? China revised its huge investment policy even before the Covid-19 outbreak. Now the Asian giant appears to be embracing less invasive forms of economic cooperation.

After years of tension and uncertainty, Berlin made its decision and opened the door to Beijing. China, through the state-owned Cosco (China Ocean Shipping Company), was to buy 24.9% of the shares from Hamburger Hafen und Logistik AG (Hhla), one of the four main terminals in the port of Hamburg, one of the largest in Europe (Hhla), the federal city of the German city belongs to the management. The Asian giant would thus seize one of the most strategic German estates, thanks to the compromise observed by Chancellor Olaf Scholz (who was mayor of Hamburg), who was to sell the originally planned 35% stake.

The Chancellor is heading straight ahead, despite opposition from six German ministers, the Bundestag, and the country’s intelligence agencies. It does this by reassuring 24.9% that the Chinese giant will not allow it to influence the management of the terminal or have a veto on strategic business or personnel decisions. There is another stricter restriction: Cosco will not be given the right to appoint members of the management.

The Chinese giant has not just focused its attention on the port of Hamburg. The Cosco group is the world’s fourth largest container shipping company and owns a 40% stake in Vado Gateway, the deep-sea container terminal in the port of Savona Vado Ligure, which is jointly managed by the Italian company APM Terminals Vado Ligure Spa. It consists of APM Terminals (50.1%), Cosco and another Chinese company, Qingdao Port International (9.9%). But the list of Cosco’s presence in ports around the world is long.

The Chinese giant therefore entered the port of Trieste quietly. Hamburger Hafen und Logistik AG has recently become the majority shareholder of 50.01% of the multi-purpose terminal “Piattaforma Logistica Trieste” (Plt) in the port of Julian. This share includes the share of the Chinese giant.

To suppress the debate that has arisen in the Bundestag, he noted the nature of cooperation with the German logistics and transport company (on its website) Cosco – which we read – “does not create one-sided dependencies”. On the contrary: “It strengthens supply chains, secures jobs and enables value creation in Germany”. For this reason, Hhla points out that the Chinese giant has not acquired any exclusive rights over the Tollerort Container Terminal, which is managed by the German company.

The question is complex, and experts are reassuring: Cosco’s presence in Julian port – even minimally – should not represent security issues. But how did we get here?

To understand how Cosco entered the port of Trieste (hence a secondary entry), we need to rewind the tape to 2019, when Italy signed a Memorandum of Understanding with the People’s Republic of China. The yellow-green government that headed Palazzo Chigi at the time opened the Italian door to the New China Silk Road (Belt and Road Initiative – BRI), the infrastructure megaproject that President Xi Jinping aspired. The initiative initiated by the Chinese leader during his official visits to Kazakhstan and Indonesia in 2013 has a dual aspect: the Silk Road Economic Belt, which is the terrestrial economic belt, and the Maritime Silk Road, which is marine. Initially, the two routes were referred to as One Belt, One Road and later came under the umbrella of the Belt and Road Initiative.

Purely Italian rarity

Italy thus became the first and only G7 country to sign this agreement with the Asian giant. The signing of the Memorandum of Understanding was accompanied by a series of commercial agreements that managed to arouse international interest, including an agreement between Genoa and the port of Trieste and the state-owned China Communications Construction Company (CCCC). The Greek port of Piraeus, which was privatized in 2016 by the Chinese Cosco, which controls 67% of the infrastructure, has alarmed the European Union and the United States, which are concerned about the increasingly significant entry of Chinese state companies into China. with special attention to foreign ports, underdeveloped or economically struggling infrastructure.

Why is China staring at Europe’s strategic infrastructure? The reasons are simple and mainly acknowledged for the critical role ports play in the Belt and Bar Initiative, a project aimed at simplifying connectivity along the trade route and accessing wider foreign markets. But above all, it responds to geopolitical and economic imperatives.

First of all, Beijing pays special attention to the sea route of the BRI because it represents a safe and protected route from the political and military turmoil that may arise along the Central Asian land route (this route – inevitably – the route through which New Silk passes). The road passes overland). From northern Europe to southern Europe, Chinese companies are gradually increasing their presence in maritime infrastructure.

And to support the sea route, Beijing has thought of everything. The launch of the Maritime Silk Road was followed in 2016 by the opening of the Asian Infrastructure Investment Bank (AIIB), an international organization with 106 members from different countries (in addition to main partner China, there are also India, Russia and Russia). Italy) and investing $39.44 billion in 205 infrastructure projects to date.

With the huge economic contribution of the banking institution designed to support the infrastructure project, the Chinese giant has been able to expand widely in countries in Africa, Asia and Latin America. Cosco holds minority shares in the ports of Antwerp and Zeebrugge on the North Sea coast, the ports of Las Palmas in the Canary Islands, Rotterdam in the Netherlands, Bilbao and Valencia in Spain, and Haifa in Israel. To these we must add, of course, the port of Piraeus and the port of Hamburg.

However, in recent years, southern European ports have started to receive increasing attention from China. In a report by IAI (Istituto Affari Internazionali), Francesca Ghiretti explains that their appeal is based on one specific factor: the expansion of the Suez Canal and the increase in the volume of trade to and from the Mediterranean; Chinese investment in maritime infrastructure in Southern Europe. The expansion of the Suez Canal was completed in 2016, the same year that Cosco bought the shares in the Greek port of Piraeus.

But the actions of Chinese giants are not always transparent. One of the criticisms leveled at the BRI is the lack of clarity about the true aims and objectives of the megaproject, which covers 147 countries that make up two-thirds of the world’s population and account for 40 percent of global GDP.

And above all, doubts have grown about the shadow of Chinese loans given to fragile economies under the banner of the BRI with large economic donations on opaque terms to build roads, bridges, stadiums and hospitals. It is the so-called “debt trap” that poses a real risk to debtor countries. A system that allows various Chinese state-owned enterprises (SOEs) investing in BRI projects to tap into the assets of countries with high debt to the Asian giant. However, several studies have highlighted Beijing’s attempt to renegotiate its debts rather than hand over its public infrastructure.

Ghiretti writes in his report that the vagueness and ambiguity of the terms of the contract caused many to raise their eyebrows on the occasion of the signing of the Memorandum of Understanding between Rome and Beijing in 2019. But as the researcher points out, “The memorandums of understanding of the ports of Genoa and Trieste with the CCCC were far-reaching statements of intent. As in other cases, they had the potential to be the first step towards promoting the CCCC’s presence in Italy.” The deals – we’ve read – limit the scope of the Chinese giant’s business, which, like other issues, must be awarded through public tenders”.

In this way, the national and European legal framework limits the ability of foreign companies to acquire presence in key sectors of states’ national economies. Also in Italy, the government can use the Golden Power to control and possibly block incoming foreign investment.

Golden power, what the Made in Italy shield is and what it is for

Bri’s new look

However, a wave of enthusiasm for China’s generosity has been thwarted by the economic and geopolitical challenges China has faced since the BRI was launched. Even before the Covid-19 pandemic, the Asian giant revised its huge investment policy, which, above all, aroused the interest and goals of autocrats. From 2016 to 2019, China turned off the tap on monetary donations: A total of $79 billion went from $75 billion to $3.9 billion in three years, about 94% less, according to data from Boston University’s Center for Global Development Policy.

Thus, the decline in loans can be attributed not only to the economic chaos caused by the pandemic, but also to a series of geopolitical pressures, domestic economic problems in China, and the introduction of regulations that Beijing wants to reduce and control investment abroad.

In recent years, the People’s Republic has therefore adopted a more sustainable and cheaper model, proposing a new perspective on the transcontinental megaproject: Beijing has moved from infrastructure to promoting deals in sectors such as trade, telecommunications, green energy and green energy. academic world

China appears to be adopting less invasive forms of economic cooperation so as not to damage economic relations with countries connected to the New Silk Road, including Italy. Because with the new manager led by Giorgia Meloni, Rome suspended the decision to exit the mega project that Xi Jinping wanted.

According to an unconfirmed rumor posted online by Intelligence, Prime Minister Meloni, who may travel to China in the spring during the Third Forum on the Silk Road, reviewed her stance towards the Asian giant. The nationalist sitting in Palazzo Chigi seems to have changed his mind from an initially anti-Chinese turn: The imperative now is to maintain good relations with China.

Source: Today IT