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Italy’s key role in China’s expansion over the European Community

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di Andrea Oliva

It’s definitely no secret at all, that relationships between the European Union and the People’s Republic of China haven’t always been easy nor gone smoothly. China is also currently in the middle of a delicate trade-war with the USA, who recently decided to postpone the fees that were due to come into force on the 1st of March. It’s during such hard times like these that it would be better to have some loyal allies on your side. That’s what Xi Jinping, secretary of the Communist Party of China and China’s Republic president, must have thought when giving birth to the 16+1 project and the ambitious “Belt and Road Initiative” (BRI).

The BRI project is an ambitious plan costing about $1trn to connect Asia, Africa and Europe, with Chinese companies securing most of the work that have to be done along the way, making right now more than $340bn.

The 16+1 format is a program started by China in 2012 in order to intensify and expand cooperation with 11 EU countries: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia; and 5 Balkan countries non-EU members: Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

What are the benefits and the potentials risks of these projects?

Many infrastructures were built since 16+1 was started, such as Serbia’s E763 Highway project, Croatia’s Peljesac bridge, Budapest-Belgrade railway and a highway in Montenegro. All these huge constructions have been possible thanks to Chinese companies that backed by state banks have invested more than $15bn, according to the data collected by the Center for Strategic and International Studies.

What makes China’s funds really appealing is that Xi Jinping’s Republic is able to finance and build roads, railways, power stations and other kinds of facilities that are deeply needed by the poorer European countries in a fast and efficient way, requesting considerably less guarantees than the European Union.

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In fact, a problem that is always faced by the poorer countries in Europe is that the EU takes too much time to allocate its funds and its bureaucracy doesn’t really help either. Regarding to this matter, Johannes Hann, the EU commission responsible for negotiating with countries wanting to join the community claimed that: “Europeans might not be the fastest ones, and may seem to demand more than the others, but probably at the end of the day we are by far the fairest partners”. Mr. Hann is quite worried about the fact that, “China never cares how and if a country is able to pay its loans. And if they cannot pay, there is some pressure that things are transferred into their ownership.”

Mr Hann then concludes by saying that, “Europe may have underestimated Chinese influence over the continent”. Behind these words full of concern there are multiple and complicated implications regarding the real justification that is currently leading China to invest in Europe. According to many people at the European Community, what China is really aiming to get is not a simple good return on investment but it’s a cunning path to pursue a strategic diplomacy or as some call it as well,“infrastructure diplomacy”. Xi Jinping is building relations where he has more leverage and exploiting those new relationships where he has less leverage.

The Belt and Road Initiative, could represent the umpteenth proof of the theory around the infrastructure diplomacy. According to the Chinese government it is “a bid to enhance regional connectivity and embrace a brighter future” but it wouldn’t even be that hard to imagine that it could be easily used as a means to push for Chinese dominance in global affairs with a China-centered trading network.

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What are the implications of the infrastructure diplomacy?

The main concern for the European Union at the moment, besides those 16 countries getting considerable bargaining power, is that China might become strong enough to frustrate some aspects of the EU’s common China policy.

The EU requires unanimity on most matters of common foreign and security policy, granting every member veto power. In any case it’s important to pay attention to the fact that if the group takes on two more EU members, a block of 13 countries would be enough to defeat EU measures decided under qualified majority voting which is used in about 80% of legislation.

A particular event that actually adds a foundation to this concern, is dated back to last year, when a debate took place about how to respond to an international court ruling that China’s claims to maritime rights and resources in the South China Sea were incompatible with international law. In the end, after three days of difficult talks among the EU’s 28 members, a strong opposition from Hungary and Greece succeeded in weakening the statement to the extent that it did not directly mention China.

What would be the role played by Italy in such a complicate tangle of events?

The Italian government has recently decided to formally endorse the BRI project mentioned above as it is pretty sure that supporting the so called “One Belt One Road” plan would highly increase its volume of exports to China even if the White House and Bruxelles don’t look at it at the same way.

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“We view BRI as a ‘made by China, for China’ initiative,” Garrett Marquis, White House National Security Council spokesman claimed. “We are skeptical that the Italian government’s endorsement will bring any sustained economic benefits to the Italian people, and it may end up harming Italy’s global reputation in the long run.” From Bruxelles instead, politicians have no doubts about the Belt Road being used as a Trojan horse realized to keep developing the strategy, already born with the 16+1 project, to divide the EU’s member states.

Even though right now all the members of the 16+1 have already joined the BRI, in this case, Italy is a founding member of the European Community and its  support of China would undermine Brussels’ efforts to overcome divisions within the EU over the best approach to deal with Chinese investments. If China has already been able to destabilize the European environment with its 16 allies, it’s absolutely clear that having such a representative partner from the EU, like Italy, is just the icing on the cake. With Italy joining on board, China would finally acquire much more power and credibility as well as getting a sizable ally inside the community and as many analysts predicted, this could lead to a period made of more instability in the relationships with China and also other tensions between the members.

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