Infrastructure project: “New Silk Road” project: Italy says arrivederci

The beginning was full of pomp: red carpet, guard of honor, helicopter in the air. In March 2019, in the Villa Madama in Rome, the then Italian Prime Minister Giuseppe Conte and China’s state and party leader Xi Jinping signed an agreement according to which Italy would be the first large Western country to take part in the Chinese mega-project of a “New Silk Road”.

The end four and a half years later took place very meekly: according to Italian media reports, Rome informed about the exit with a formal diplomatic note. Officially there was silence about it.

From the official residence of the current Prime Minister Giorgia Meloni, who has been at the head of a government of three right-wing parties for just over a year, the only response on leaving the Via Della Seta (Silk Road) was: “No comment.” At least there was something like confirmation from her Foreign Minister Antonio Tajani. “We have seen that the Silk Road did not bring the hoped-for effects,” he said at an event hosted by the Adnkronos news agency.

This is Beijing’s megaproject

The “New Silk Road”, launched ten years ago, is a global investment and infrastructure project by China. The initiative includes land and sea projects that are part of the “Maritime Silk Road”.

Because of the project, chronically indebted Italy had to put up with a lot of criticism from its Western partners. Italy was the only country from the Group of Seven major democratic economic powers (G7) that decided to take part, and also the only large country from the EU. This was justified with better export opportunities, with the hope of investments – for example for the ports in Trieste and Genoa – and also of even more Chinese tourists.

China, in turn, as the second largest economic power, wants to open up new trade routes around the world, on land and at sea. “New Silk Road” is derived from the world-famous ancient trade route that extended to Europe. Beijing has now invested almost a trillion euros in the project. In many developing countries, roads, railway lines, airports and seaports emerged where none existed before. However, critics say that many countries are becoming increasingly dependent on China due to new debts. There are currently around 150 countries participating, including Russia and Serbia. Hungary is now part of the EU.

Rome must not anger Beijing too much

Meloni never made a secret of the fact that she didn’t like the idea. The leader of the far-right Fratelli d’Italia (Brothers of Italy) party declares that the nation’s sovereignty is sacred. In recent months there has been increasing speculation that the exit is imminent. The USA is also putting pressure on it. The background is that the collaboration would have automatically solidified in March if the project had not been canceled by the end of the year.

However, Italy’s goal is of course not to upset Beijing too much. There are concerns from companies that products made in Italy will no longer sell so well in the People’s Republic. The Italians also fear lucrative contracts that would put them in competition with EU partners such as Germany and France. That’s why Meloni assured the Chinese at the same time as the farewell note that they definitely wanted to stick to the “strategic partnership”.

For China, which is increasingly in competition with the USA, the departure certainly means a loss of prestige. There was initially no comment from the Foreign Ministry in response to a request from the German Press Agency. When the first speculations arose some time ago, it was pointed out that cooperation had been greatly expanded since the agreement was signed. Trade has increased by 42 percent within five years.

In Brussels, however, the news from Rome created a good mood. In the EU and NATO, Italy’s participation has recently been increasingly viewed as a strategic mistake and also a security risk. The general goal there is to reduce economic dependencies. At NATO, there is a particular danger that Beijing will try to “bring key areas of the technology and industrial sectors, critical infrastructure as well as strategic materials and supply chains under its control.”

There will probably not be much positive news for China at the EU-China summit this Thursday in Beijing. Commission President Ursula von der Leyen and Council President Charles Michel want to make it clear that the EU could impose trade restrictions such as special tariffs if China continues to pursue unfair subsidy practices and close its own market to European companies.