Italian Prime Minister Giorgia Meloni expressed dissatisfaction with the Belt and Road Initiative (BRI), citing a lack of significant benefits for Italy, government sources told the international news agency on Wednesday.
The Reuters source confirmed that the 2019 agreement, which expires in March 2024, will not be renewed.
Despite concerns about potential damage to relations and the economy, Italy is committed to maintaining „excellent relations with China” outside of the BRI.
What is the BRI?
Just a few weeks ago, in October 2023, China celebrated the 10th anniversary of the Belt and Road Initiative with 23 big dogs in attendance, including Russian President Vladimir Putin.
Launched by President Xi Jinping in 2013, the BRI is a strategic undertaking that aims to promote connectivity between Asia, Africa and Europe through land and maritime networks. The initiative consists of the Silk Road Economic Belt, a transcontinental land route connecting China to various regions, and the 21st Century Maritime Silk Road, a sea route connecting China’s coastal areas to Europe through various regions.
The BRI focuses on five key priorities, including policy coordination, infrastructure connectivity, unimpeded trade, financial integration and people-to-people connectivity. The project is notable for its extensive infrastructure investments in ports, roads, railways, airports, power plants and telecommunications networks, and since 2019 has seen a shift towards prioritising 'high value investments’, with an emphasis on project finance, risk mitigation tools and green finance.
However, the Belt and Road Initiative has faced criticism on several fronts. One major concern is that the initiative will involve developing countries in large-scale projects that will strain their small economies, lead to unsustainable debt levels and create what are perceived as debt traps. This is often referred to as 'debt trap diplomacy’.
Geopolitical influence-peddling has also been a contentious issue, with the influx of Chinese nationals into local communities and the local opposition it has provoked.
The overall nature of BRI projects is often described as predatory, with critics arguing that China benefits disproportionately while host and partner countries receive minimal benefits. This perception is fuelled by the predominance of financing from Chinese state-owned banks, with terms that potentially allow China to demand repayment at any time. Contracts tend to be awarded to Chinese firms, leading to limited realisation of promised local employment opportunities. There are also suspicions about the dual nature of Chinese projects, raising concerns, particularly in regions such as South Asia, that the infrastructure developed under the BRI could have military applications in the future. Taken together, these criticisms highlight the complex challenges and controversies associated with China’s Belt and Road Initiative.
Why is Italy leaving the BRI?
According to the American think tank ‘Council on Foreign Relations’, Italy’s decision to withdraw from the Belt and Road Initiative stems from the realisation that the economic benefits promised by the BRI have not materialised as expected.
Despite the signing of several institutional agreements with China covering various areas, including trade and cultural exchanges, Italy’s economic relations with China have not improved significantly.
Since joining the BRI, Italy’s exports to China increased modestly from €14.5 billion to €18.5 billion, while Chinese exports to Italy increased significantly from €33.5 billion to €50.9 billion.
Prime Minister Giorgia Meloni, who described the BRI as a „big mistake”, highlighted the lack of benefits for Italy, pointing out that it is the only G7 member with such an agreement, but not the Western country with the strongest economic ties to China.
Defence Minister Guido Crosetto described Italy’s participation in the BRI as an „improvised and cruel act”.
Photo credits @ Andrzej Otrębski, CC BY-SA 4.0, via Wikimedia Commons