This blog was contributed by Aki Elborzi (SOAS China Institute) in conversation with SOAS alumna, Ilaria Maria Sala.

China’s Belt & Road Initiative (BRI) has attracted increasing attention, including scepticism, around the World since the project was revealed in 2013. In March 2019, China’s President, Xi Jinping, made his first formal visit to a foreign country this year. For this, Xi chose Italy, and the ‘New Silk Road’ played a central part in his state visit to Rome.

The major outcome of Xi’s Italy trip was securing Rome’s formal endorsement of the BRI through the signing of a Memorandum of Understanding (MoU), the first G7 country to do so. Officials from the US, Germany, France and the European Union chided the Italians for this. The US’s National Security Council (NSC) tweeted that “Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people.” Some Italian officials hit back, calling critics of the Italy-China MoU “jealous” of the deal. But the BRI MoU has exposed divisions on China within Italy’s coalition government.

SOAS alumna Ilaria Maria Sala, a Hong Kong based journalist and author, shared her thoughts with me about Xi Jinping’s tour of Europe in March. This is part one of our interview.

(Aki Elborzi): During Chinese President Xi Jinping’s visit to Italy in March, Italy’s President, Sergio Mattarella, stated that the new ‘Silk Road’ “must be a two-way street”. Does the signing of an Italy-China MoU on the Belt & Road Initiative (BRI) signal that China is willing to open-up to Italian investors and businesses in a reciprocal manner?

(Ilaria Maria Sala): I would find this very hard to believe. The MoU that Italy has signed with China is extremely vague, and seems mostly to have been a diplomatic coup for China at a time when the BRI is losing steam in other parts of the globe – and raising some suspicions among older BRI partners.

The whole process has been conducted in a manner that is very indicative of the current state of Italian politics, in which the two souls of the governing coalition (the populist 5 Star Movement and the far-right League) have brought their internal rivalry even onto foreign affairs.

So far, Mattarella has been acting as a moderating force, especially because the role of President, in Italy, is not a political one. So I believe that Mattarella’s exhortation was directed more at the politicians who have imposed the deal than on the Chinese themselves (Parliament was not allowed to discuss the details of the MoU, in spite of their request to do so).

Italy’s port of Trieste signed an agreement with the China Communications Construction Company (CCCC) to develop the port’s infrastructure. In the absence of major investment from other sources, can Chinese investment in the Italian port be a “win-win” for both sides?

It really remains to be seen. The opacity of the agreement doesn’t bode very well: what Italy may have hoped for was further investments to enlarge and modernize Trieste’s port, in order to export its own products.

What has transpired so far seems to be a win-win for China, which is winning twice: on one hand, because it is going to have its own State company developing the port, and once that is done, because Chinese cargo ships will have a very convenient gateway to landlocked European countries just north of Italy, like Austria, Switzerland, the south of Germany, etc. Italy has rushed towards this agreement with very little negotiating acumen.

China has shown interest in investing in the port of Trieste, Italy. Photo credit: Franz Jachim © (Source: Flickr)

Italy’s signing of the MoU with China on the BRI was broadly met with opposition from EU, German and French officials. The EU’s budget commissioner, Günther Oettinger, went so far as to suggest that the EU could look into vetoing agreements made by member states that run counter to European interests. Why is the EU’s position on the Italy-China MoU so negative?

Because since the current coalition has come to power, in June of 2018, Italy has had a very antagonistic attitude towards the EU. The populists like to attack Brussels as some kind of bureaucracy-ridden, out-of-touch behemoth that only does the good of corporations. The far-right has a very strong anti-immigration agenda, in particular due to the Interior Minister, Matteo Salvini, who has been meeting with xenophobic far-right representatives all over Europe. It is hard for Brussels to trust such an unreliable partner. And once more this makes it harder to have a coordinated approach with a massive actor like China: remember that China doesn’t like to negotiate deals with larger blocks, like the EU or even ASEAN, because, understandably, it prefers to negotiate from a position of strength.

The decision to break ranks and become the first G7 country to sign on to the BRI initiative is akin to what the UK did in running to join the Asia Infrastructure Investment Bank (AIIB), China’s answer to the World Bank, before even deciding on a common strategy with the EU. It is this kind of opportunistic go-it-alone initiative that weakens the EU, for dubious national gain.

Xi Jinping followed on from his trip to Italy with visits to Monaco and then France. Some analysts believe that the outcome of the France-China meeting was a success for both sides, whereas the outcome of the Italy-China meeting was beneficial mainly for China, and that Italy received very little in comparison to France from Xi’s visit. Is this a fair or accurate assessment of Xi Jinping’s tour of Europe?

I think it is pretty accurate. France didn’t compromise itself by joining the BRI, while signing deals with China worth more than 40 billion euros. Italy, on the other hand, has concluded very little in practical terms, and lost all of its leverage.

 

(To be concluded in part two)

 

Ilaria Maria Sala (BA Chinese and Religious Studies, SOAS University of London) was born in Italy, grew up in Bologna and Florence, and now lives in Hong Kong where she is a journalist and writes about China. She is a winner of the Bruce Chatwin Award for travel literature for Il Dio dell’Asia: Religione e Politica in Oriente: Un Reportage, a book of travel features about religion. Ilaria is also the winner of two Human Rights Press Awards.

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