A person stands in front of a sign of the Third Belt and Road Forum ahead of its opening ceremony, near the media centre in Beijing, on Oct. 18.TINGSHU WANG/Reuters
In a blow to Beijing’s efforts to gain a greater trading, investment and political foothold in Europe, Italy has formally withdrawn from China’s Belt and Road Initiative after four years of membership.
Italy, the European Union’s third-largest economy, was the only Group of Seven country to join the BRI. Its membership in the global infrastructure development program irritated the United States and many countries in Western Europe, whose relationships with China have become strained in recent years.
Those relationships suffered a further blow after Russia invaded Ukraine almost two years ago. Beijing has deepened its links with Moscow since then, though there is no evidence that China has supplied lethal weapons to Russia for use against Ukraine.
With great fanfare, Italy joined the BRI in 2019, delivering a huge political win to Chinese President Xi Jinping and creating suspicions in the West that China would use Italy as a Trojan horse to infiltrate Europe. At the time, Italy was governed by a populist government led by Giuseppe Conte, the leader of the Five Star Movement. He and his coalition partners were desperate to attract foreign investment, especially in the economically deprived southern regions of the country, whose decaying seaports would have benefited from such investment.
The conservative government of Prime Minister Giorgia Meloni, leader of the Brothers of Italy Party, made no public announcement about withdrawing from the BRI, though the Italian media reported that Rome had sent a letter in recent days informing Beijing that it would not renew its membership. If Italy had not formally withdrawn, it would automatically remain in the BRI for a second five-year term, ending in 2029.
Ms. Meloni made it known earlier this year, as the untested leader affirmed her pro-West, pro-EU stand, that Italy’s membership in the BRI might be untenable. She called Rome’s participation a “mistake” and said her new government might abandon the pact. At the same time, she said she wanted to maintain “mutually beneficial” relations with Beijing.
George Tzogopoulos, a lecturer at the European Institute and the author of the 2021 book The Miracle of China: The New Symbiosis with the World, told The Globe and Mail that Italy may not know for years whether withdrawing from the BRI will hurt the economy.
“The decision of Italy echoes the new geopolitical context in which the West sees China as a competitor, if not a rival,” he said. “If economic ties remain as strong as they are today, then the entire discussion about BRI will be largely symbolical. But there is no precedent to rely on, since no other country has left the BRI.”
While trade between Italy and China is fairly strong, China’s trade with France and Germany, the two largest EU economies – neither of them BRI members – is much stronger. In 2022, Italian exports to China reached €16.4-billion, up from €13-billion in 2019, the last year before the pandemic. Exports of Italian-made pharmaceuticals led the rise.
Italy has attracted little investment from China, suggesting its membership in the pact had, so far, been more symbolic than practical. Data from the Rhodium Group, a New York research institute, showed that China’s direct foreign investment in Italy was only US$33-million in 2021, a sharp drop from U$650-million in 2019. Chinese investments throughout the EU have been in broad decline in recent years, reaching a decade low of €7.9-billion in 2022, down 22 per cent from 2021.
More than a dozen EU countries, most in Eastern Europe, are members of the BRI. Greece has been an enthusiastic supporter of the pact since it joined in 2018. China redeveloped the Greek container port of Piraeus, near Athens, turning it into one of the biggest and most competitive logistics hubs in the Mediterranean.