September 23, 2023

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Italy pulls out of New Silk Roads, Chinese plan becomes dead end

Italy pulls out of New Silk Roads, Chinese plan becomes dead end

Rome plans to withdraw from the “New Silk Roads” launched by China in 2013, which have not brought the expected economic benefits. A delicate operation at the diplomatic level.

To understand what these new Silk Roads laid out by Xi Jinping in 2013 mean, you have to imagine a giant network of land, sea, air or rail routes starting in China and reaching Europe, Africa and South America. .

A weapon of economic and strategic influence, China has invested about $1,000 billion in it. 150 countries have joined the scheme, which is synonymous with new money. Among them, Italy (the only G7 country to do so) launched in 2019 as its public debt became unsustainable. The partnership is due to resume next March for five years. A precedent, it will not be renewed.

>> On the Indo-China border, Beijing is trying to expand its territory

Economic benefits are minimal

Rome did not find its account, quite simply. Promised investments in the ports of Trieste and Genoa did not produce anything tangible. Italian exports to China increased slightly from 11 to 16 billion euros, but Chinese exports to Italy more than doubled to 50 billion euros.

Italy was not a base country for the Silk Roads in terms of trade volume, but from Rome, the disparity was much greater. Our Role”We did not get the expected results“, Italian diplomatic chief Antonio Tajani assessed before flying to Beijing this week.

For Georgia Meloni’s far-right government, the economic benefits are small compared to the political costs of rapprochement with Beijing, which supports Russia in its war in Ukraine and whose relations with the United States are not good. Italy often prefers to anchor itself on the side of Washington and NATO.

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This diversion from Silk Roads was already in the pipeline. Giorgia Meloni’s predecessor, Mario Draghi, used the government’s right to block Chinese investment in sectors deemed strategic. So Beijing is not surprised, but the prime minister is walking on eggshells. There is no question of offending the regime and taking the risk of retaliatory measures, especially against the luxury sector. So Georgia Maloney will travel to China in person in mid-October to explain her decision.

Two-thirds are highly indebted countries

Italy is not alone in distancing itself: LBeyond the win-win promised by Beijing, two-thirds of the countries participating in the New Silk Roads are deeply indebted. Because Chinese investments are, in fact, loans with high interest rates that they can no longer pay back, unless they give up their infrastructure to their partner, as they did in the Sri Lankan port project. This is called a “debt trap”.

Some countries have tried to renegotiate their agreement, while others have frozen all plans. Westerners are increasingly wary of the danger of Chinese hegemony.

>> China warns of risk of new “Cold War”.

A major forum dedicated to the New Silk Roads is due to be held in Beijing in October, where dozens of heads of state and government are expected, including Vladimir Putin. The meeting should allow China to defend its plan and get it back on track. The Silk Roads that were promised ten years ago now look like a dead end.