Last Friday, Prime minister Giuseppe Conte confirmed that his government is considering a bilateral agreement with China in the context of the One Belt, One Road initiative (BRI).
President Xi Jinping will visit Italy on March 22-24 with the objective of signing a Memorandum of Understanding that anchors Italy to the BRI project.
“With all due caution, I think it can be an opportunity for our country,” Conte said.
The objective of the MoU is to tap into the underexploited potential of the Chinese market. Italy currently exports 15bn worth of good and services to China, which is approximately the volume of exports to Belgium.
The Italian commitment comes with a promise of billions in infrastructural investment, at a point in time that Italy thirsts for good news. Having experienced two consecutive quarters of negative growth, Italy is officially in recession.
However, Chinese investment is becoming increasingly controversial. Extracts of the MoU were leaked to the press. The document makes reference to cooperation in logistics infrastructure, including highways, airports, ports, but also energy.
Following a statement by Conte on Wednesday it is now clear that the MoU does not entail specific reference to 5G communications networks.
Currently, this discussion is at the epicentre of a transatlantic dispute as a number of EU member states are cooperating with Huawei, which Washington claims would impede intelligence sharing between allies. These include Germany, the UK, and Poland. In any event, the European Commission report makes reference to oversight measures and regulation rather than banning Chinese companies from the development of 5G infrastructure.
The question of providing access to strategic infrastructure to Chinese companies in no less controversial.
Sources close to the government in Rome claim that the confusion surrounding the content of the MoU originate by ambiguous statements of individual Italian negotiators. This ambiguity relates to a statement of readiness to sign an MoU draft that had not as yet been discussed and agreed upon by the cabinet.
In a social media post on Thursday, MEP Stefano Maullu of the conservative group Brothers of Italy accused the government of lack of transparency on the content of the MoU. Commenting on the substance of the framework agreement, he echoed a criticism that is increasingly voiced in Brussels and Washington, namely that “in any case, we cannot permit China to take hold of important pieces of Italy, its strategic infrastructure, its ports.”
The ports of Genoa and Trieste are currently developing a special relationship with Chinese importers and logistics companies. Significantly, this is based on concessions rather than the surrender of management as in the Greek Port of Piraeus. Still, the word “colonization” features prominently in an increasingly polarized debate.
A European Commission report backed by the President of the European Commission Jean-Claude Juncker and the External Action Service chief Federica Mogherini brands China an “an economic competitor and systemic rival” and calls for EU-wide regulatory oversight overs its investments in Europe.
References to the document were also made by the Italian daily La Republica on Monday, in which the Commission urges member states not to make agreements with Beijing on a bilateral level, so as to maintain a united front.
Last week the White House criticized the BRI as a “made by China, for China” initiative and expressed the opinion that the deal would not have “sustained economic benefits” for the Italian people.
Suddenly the MoU with Italy was seen as a test for Italy’s two most crucial alliances, the EU and NATO.
Conte told the press on Wednesday that the memorandum was “perfectly compatible” with Italy’s position in NATO and Europe and there is “no risk of colonization.”
On March 7, deputy prime minister Matteo Salvini told a news conference in Potenza, Italy, that the MoU was mostly about supporting Italian companies investing abroad rather than the colonization of Italy.
The European Commission’s view that engagement with China is desirable but only under a European regulatory framework were also echoed by Professor Corrado Clini, the former environment minister of the Monti government and an authority on Sino-European cooperation. In an interview with TG3 (Linea Note), Clini argued that the discussion thus far has been purely “symbolic” – essentially a blame game – advocating a consolidated EU-China deal that would set the rules of the game.
“This agreement does not contain anything new in substance, what is new is the method of negotiation, Clini told New Europe” adding that “the agreement builds on preexisting schemes of bilateral cooperation on science and technology, the environment, and culture. Eventually, strong cooperation with an assertive Europe is a guarantee for the US, as it ensures western standards and reciprocity.”
Italy is by no means a trailblazer in aspiring to a special relationship with China. Similar MoUs have been signed by Croatia, the Czech Republic, Hungary, Greece, Malta, Poland, Slovenia, and Portugal.
“The question is not whether to engage with China, which is Europe’s second-biggest trading partner, but how. That is the question in Italy and that is the question in Europe,” argues business consultant Arvea Marieni, a Hamburg-based innovation technology consultant who has worked on Sino-European corporate relations for more than a decade.
“A strong Europe is in China’s own interest,” she adds, “in this sense the symbol of a two-way flowing road is quite effective. China wants access to the Single European Market, not bits and pieces of it.”
Admittedly, Italy is not just another EU member state but a G7 economy. Having arranged an official visit, it appears talks are too advanced to back off. Last Friday, the Chinese foreign minister Wang Yi called on Italy and the EU to affirm their independence and sign the MoU.
Rome intends to sign the MoU, affirmed Conte on Friday. But this is not the same document leaked to the Italian press but a more lean and edited version.
Diplomatic sources and the government in Rome suggest that the original text was drafted by the Ministry of Economic Development, in the aftermath of a visit to China in September 2018. The process did not involve consultations with the whole coalition government. This view was also expressed on the record by the Undersecretary of the Ministry of Foreign Affairs Mr. Gulielmo Picci.
In any event, deputy prime minister Matteo Salvini will not be present during the signature of the MoU, making clear they prioritize Atlantic links, Italian media report.