The first developed economy of the west to agree to be a part of the global investment programme of China is Italy. This decision by the European Member country has however raised concerns among the western ally’s of Italy.
During Chinese President Xi Jinping’s visit to Rome, the two parties signed a total of 29 deals worth a total of €2.5bn ($2.8bn).
The project – which is known by a number of names such as the ‘One Belt One Road’, the Belt and Road Initiative (BRI) and the ‘new Silk Road’ aims to reconnect China to Europe just like the ancient trade route had done.
Concern at China’s growing influence has been expressed by Italy’s European Union allies and the United States.
The basic premise of the project is the financing of a large number of infrastructure projects by China all around the world with the aim of increase the speed of Chinese goods reaching far off markets. China’s critics however view the project to a an effort by China to gain geo-political and strategic influence.
The project has seen the funding of trains, roads, and ports by Chinese money and implemented through Chinese construction companies working on lucrative contracts to connect ports and cities. The funding from Chinese banks to the countries where the projects are being implemented is in the form of loans.
Many experts and analysts in the west are now concerned with the levels of debt that many African and South Asian nations owed to China. However the money has constructed roads and railways that would not exist otherwise.
An umbrella deal that formally made Italy a participant in the Economic Silk Road and The Initiative for a Maritime Silk Road for the 21st Century was signed by Italy’s Deputy Prime Minister Luigi Di Maio, leader of the populist Five Star Movement, on behalf of Italy.
Deals over energy, finance, and agricultural produce were then signed by separate ministers. That was followed by deal singing between heads of big Italian gas and energy, and engineering firms – all of which have been assured entry into the Chinese market.
Within this deal singing, Italy became the first member of the G7 group of developed world economies to accept Chinese money and debt. Despite Rome being among the top 10 largest economies of the world, it has been in trouble of late. The country’s struggling infrastructure was made a major political issue for the first time in decades after the collapse of the Genoa bridge in August win which dozens of people were killed.
Further, no one can say that Italy’s economy would be booming anytime soon.
At the end of 2018, recession hit the economy with national debt levels the highest among the countries in the eurozone. In June 2018, a populist government came into power in Italy and promised high spending even though it had to retract those plans following a tiff with the EU.
“Italy has arrived first on the Silk Road and therefore other European countries at this moment have taken a stance on our trade decisions. They have taken a critical view and they have the right to this opinion.We do not want to override our European partners. We firmly remain in the Euro-Atlantic alliance and we remain allies of the United States in Nato,” Di Maio told a news conference.
(Adapted from BBC.com)