New Delhi, Sep 16 (SocialNews.XYZ) Italy’s withdrawal would deal another blow to the Belt and Road Initiative (BRI), which has already been scaled back as recipient countries grapple with debt distress, Chinese banks seek to reduce their exposure to risky loans, and China grapples with mounting domestic economic challenges, writes David Saks in Council for Foreign Relations.
David Sacks is a fellow for Asia studies at the Council on Foreign Relations (CFR).
European countries are increasingly focused on “de-risking” their economies and will be reluctant to increase their economic dependence on China, making it unlikely that any major economy will soon join the BRI, Saks said.
Italy appears poised to withdraw from the BRI, a reflection of frustrations with the initiative’s unmet promises and the country’s strategic reassessment of China.
Italy’s withdrawal from the Belt and Road Initiative would reflect disappointment with the lack of economic benefits and a more fundamental strategic rethinking of China.
In 2019, during Chinese President Xi Jinping’s visit to Rome, Italy shocked the United States and Europe by becoming the first Group of Seven (G7) country to join China’s Belt and Road Initiative (BRI), the largest ever global infrastructure undertaking, Saks said.
It is not difficult to see why the BRI enticed Italy. Having suffered through three recessions within a decade, Italy was looking to attract investment and expand Italian exports’ access into China’s huge market.
At the time, many Italians felt abandoned by Europe, while its populist government was skeptical of the European Union (EU) and more than willing to turn to China to fulfill its investment needs. Italy saw an opportunity to leverage its political weight to sign on to the BRI in hopes of beating out others for Chinese attention and investments.
More fundamentally, Italian withdrawal from the BRI would reflect the growing transatlantic convergence on the challenge China poses, Saks said.
European countries increasingly view China as a rival rather than as a partner or competitor, while President of the European Commission, Ursula von der Leyen, recently argued that “the Chinese Communist Party's clear goal is a systemic change of the international order with China at its centre", pointing at the BRI as evidence.
Beijing’s support for Russia in its war against Ukraine has led many European governments, including Italy’s, to shed their illusions about China.
As it became clear that the BRI would not be an economic panacea, the Italian government began to reassess whether it should continue its membership. For the past year, Italian Prime Minister Giorgia Meloni has indicated that joining the BRI was a “big mistake” that she intended to correct by withdrawing from the initiative, Saks said.
Meloni cited the lack of benefits that accrued to Italy after joining the BRI, noting that “Italy is the only G7 member that signed up to the accession memorandum to the Silk Road, but it is not the European or Western country with the strongest economic relations and trade flows with China".
Russian President Vladimir Putin’s invasion of Ukraine and Beijing’s alignment with Moscow have also restored geopolitics to a preeminent position and made European countries more skeptical of Beijing’s intentions.
Putin’s plans to attend Beijing’s upcoming Belt and Road Forum have also made clear the geopolitical nature of the BRI. Italy’s reversal on the BRI should therefore be seen as driven less by economic considerations and more by the new geopolitical reality facing Europe, Saks said.