The Italian government under Prime Minister Giorgia Meloni announced last week that the country would be exiting the Chinese Belt and Road Initiative (BRI) global infrastructure agreement after being one of the leading proponents of it in Europe in prior years.
China had promised to invest around 20 billion euros in Italy in 2019, according to a BBC report, when the former Italian government led by then-Prime Minister Giuseppe Conte had signed on to participate in the BRI.
However, much of the promised investment from China has not materialized since the 2019 agreement between the two countries and was cited as one reason Italy would leave the BRI by Prime Minister Meloni.
“I think that we should … improve our cooperation with China on trade, the economy,” the Italian government leader said and added, “The tool of the (BRI) … has not produced the results that were expected.”
The move was telegraphed earlier this year in May when it was thought that Meloni would announce Italy leaving the BRI in exchange for a semiconductor deal with Taiwan.
The Council on Foreign Relations lists several more issues that many have contributed to the ending of Italy’s participation stating:
Under the auspices of the BRI, Italy signed numerous institutional arrangements with China, covering everything from double taxation to recognition of certain sanitary requirements for pork exports, cultural property and heritage sites, and minor commercial agreements. But these arrangements failed to fundamentally change the trajectory of Italy-China economic ties. Since Italy joined the BRI, its exports to China have increased from 14.5 billion euros to 18.5 billion euros, while Chinese exports to Italy have grown far more dramatically, from 33.5 billion euros to 50.9 billion euros.
Also of note is the fact that several European countries that were never part of the BRI, such as France and Germany, exported more to China than Italy last year, calling into question whether the BRI gave Italy any special relationship with China in terms of exports.
In recent years, China has become the number one trading partner for many European countries, including the European Union’s largest economy Germany, which traded 299.6 billion euros worth of imports and exports with China in 2022.
Italy has had a trade relationship with China dating back to the 1980s that really expanded under Prime Minister Romano Prodi in the late 1990s.
By 2016, China had expressed interest in Mediterranean shipping by purchasing controlling shares in the Greek port of Piraeus, and by 2019, the Italians believed they would miss trading opportunities with China if they did not sign up for the BRI as China could simply build rail infrastructure from Greece and bypass Italian ports entirely.
The deal was also attractive to China as Italian railways were already connected to Western and Central Europe, meaning the country would not have to invest in new tracks to connect Pireaus with the two areas.
Chinese officials made comments last week following the Italian announcement but did not specifically criticise the country or Prime Minister Meloni.
“China firmly opposes smearing that damages Belt and Road cooperation,” Chinese foreign ministry spokesperson Wang Wenbin said while stating that the BRI remained a source of “enormous appeal and global influence.”
The Italian move comes just over two years after Lithuania pulled out of the “17+1” group, a long-standing initiative from the Chinese to engage countries in Central and Eastern Europe.
The country went on to have a diplomatic spat with China after authorising Taiwan to set up a special Taiwanese representative in Lithuania, leading to China suspending freight train service under the BRI, halting Lithuanian exports at the border, and recalling its ambassador from the country.
“Beijing is sending a message that whoever follows Lithuania’s example, of daring to stand up to it, will face severe consequences. And such a message is best tested on a smaller country,” a senior diplomat told Politico.
China’s tactics do not seem to have worked, however, as the following year both Latvia and Estonia also quit the 17+1 group, reducing it to 14+1.
Another factor for the Baltic countries leaving the working group is China’s engagement with Russia as China has increased its trade with the country while European and other Western states have reduced trade and set up sanctions in the wake of the Russian invasion of Ukraine.
