A dire need for massive investments to revive its flagging economy is seen ass the motive force behind Italy's decision to formally endorse China's global Belt and Road Initiative (BRI). As Business Times writes, should Italy and China sign a memorandum of understanding next month during the state visit of President Xi Jinping, Italy will become the first G7 country to support BRI and its controversial infrastructure projects. Other G7 nations, especially the United States, staunchly oppose the BRI.
"We want to make sure that 'Made in Italy' products can have more success in terms of export volume to China, which is the fastest-growing market in the world," said Michele Geraci, an official in Italy's Economic Development Ministry.
Xi will visit recession-plagued Italy at the end of this month before proceeding to France and to the United States where he will meet with president Donald Trump. It is uncertain if both leaders will sign an agreement to mitigate the growth-killing effects of Trump's trade war with China.
BRI is a massive trade and infrastructure project that intends to link China with Europe, Africa, and Asia through a series of new Chinese-funded ports, railroads and roads along land and sea trade corridors.
Italy formed a China Task Force in October 2018 to investigate economic opportunities in China, including the possibility of endorsing the BRI. Li Ruiyi, China's ambassador to Italy, attended the first meeting of the task force in Italy and spoke about bilateral relations. "Italy and China were linked by the ancient Silk Road in the past," said Li. "We expect the Task Force to help strengthen the two countries' cooperation under the Belt and Road Initiative and contributing to a closer EU-China relationship."
The announcement of Italy's participation is welcome news for Beijing as more and more countries question China's motives behind the BRI and the benefits they stand to derive. Italy's decision to endorse but not become a partner in the BRI was taken amid the furor surrounding Huawei Technologies Co. Ltd, the world's leading supplier of networking equipment, and a leader in the new 5G technology. The U.S. is engaged in a campaign to dissuade its allies, Italy included, from using Huawei equipment for their national 5G projects.
Italy's struggling economy shows no sign of improvement in the near term without massive investments. It shrank 0.1 percent in the last three months of 2018 as it did in the third quarter. It was the second straight quarter of GDP decline and plunged Italy into recession for the third time in a decade. Italy's GDP growth rate averaged 0.59 percent from 1960 until 2018.
The U.S. government has always said BRI projects impose massive debts on developing countries for hardly any economic benefit. China is also using BRI to extend its military and political power overseas, according to some BRI critics.
