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Abu Dhabi, UAESaturday 20 April 2019

Italy courts China with €2.5bn deals as part of Belt and Road Initiative

The European country is the first G7 member to embrace China's ambitious infrastructure plan

 Italian prime minister Giuseppe Conte shakes hands with the Chinese president Xi Jinping during a recent meeting in Rome. EPA
 Italian prime minister Giuseppe Conte shakes hands with the Chinese president Xi Jinping during a recent meeting in Rome. EPA

Italy endorsed China's ambitious Belt and Road infrastructure plan on Saturday, becoming the first major western power to back the initiative to help revive the struggling Italian economy.

Saturday's signing ceremony was the highlight of a three-day trip to Italy by Chinese President Xi Jinping, with the two nations boosting their ties at a time when the United States is locked in a trade war with China.

The rapprochement has angered Washington and alarmed some European Union allies, who fear it could enable Beijing to gain access to sensitive technologies and critical transport hubs.

Deputy Prime Minister Luigi Di Maio played down such concerns, saying that although Rome remained fully committed to its western partners, it had to put Italy first when it came to commercial ties.

"This is a very important day for us, a day when Made-in-Italy has won, Italy has won and Italian companies have won," said Mr Di Maio, who signed the provisional agreement on behalf of the Italian government in a Renaissance villa.

Taking advantage of Mr Xi's visit, Italian companies agreed deals with Chinese counterparts worth an initial €2.5 billion (Dh10.38bn). Mr Di Maio said these contracts had a potential, future value of €20bn.

The Belt and Road Initiative lies at the heart of China's foreign policy strategy and was incorporated into the ruling Communist Party constitution in 2017, reflecting Mr Xi's desire for his country to take a global leadership role.

The US worries that it is designed to strengthen China's military influence and could be used to spread technologies capable of spying on western interests.

Italy's populist government, anxious to lift the economy out of its third recession in a decade, dismissed calls from Washington to shun the Belt and Road and gave Mr Xi the sort of red-carpet welcome normally reserved for its closest allies.

Some EU leaders also cautioned Italy this week against rushing into the arms of China, with French President Emmanuel Macron saying on Friday that relations with Beijing must not be based primarily on trade.

There was not even universal backing for the initiative agreement within Italy's ruling coalition, with Deputy Prime Minister Matteo Salvini, who heads the far-right League, warning against the risk of China "colonialising" Italian markets.

Mr Salvini did not meet Mr Xi and declined to attend a state dinner held in honour of the visiting leader on Friday.

Mr Di Maio, who leads the Five Star Movement, says Italy is merely playing catch-up, pointing to the fact that it exports significantly less to China than either Germany or France.

Italy registered a trade deficit with China of €17.6bn last year and Mr Di Maio said the aim was to eliminate the deficit as soon as possible.

After talks with Italian Prime Minister Giuseppe Conte and Mr Di Maio in the morning, Mr Xi flew to the Sicilian city Palermo for a private visit on Saturday afternoon.

He is due to head to Monte Carlo on Sunday before finishing his brief tour of Europe in France, where he is due to hold talks with Mr Macron and German Chancellor Angela Merkel.

Updated: March 24, 2019 06:50 PM

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