Italy’s planned dealings with China triggers deeper discussion about Sino-European relations

EPA-EFE//ALESSANDRO DI MEO

Italian Interior Minister Matteo Salvini (L) and Italian Prime Minister Giuseppe Conte (R) chat during a news conference for the presentation of the initiatives and celebrations marking the 500th anniversary of the death of Italian Renaissance era artist, inventor, scientist, and engineer Leonardo da Vinci, in Rome, 13 March 2019.

Italy’s planned dealings with China triggers deeper discussion about Sino-European relations


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On 15 March, Italian Prime Minister Giuseppe Conte confirmed that his government is considering putting pen-top-paper a bilateral agreement with China that would see the EU’s third-largest economy become a part of Beijing’s controversial One Belt, One Road initiative.

Conte’s announcement came only days before China’s President Xi Jinping visits Italy on 22-24 March with, where he expects to sign a Memorandum of Understanding that attaches Italy to the One Belt, One Road project.

“I think it can be an opportunity for our country,” Conte said while adding that the objective of the memorandum is to tap into the underexploited potential of the Chinese market. Italy currently exports €15 billion worth of goods and services to China, roughly the volume of Italy’s exports to Belgium, a country with a population that is only half of the 21 million residents living in Beijing’s metropolitan area.

The Italian commitment includes a promise of billions in Chinese infrastructural investment, which come at a point when cash-starved Italy is in recession.

Chinese investment in Europe is, however, increasingly controversial when it involves strategic areas of the economy. Extracts from the memorandum make references to deep cooperation in the areas of logistics and infrastructure, including highways, airports, ports, as well as energy.

Following a statement by Conte, it is now clear that the memorandum does not make any specific references to 5G communications networks as this particular topic is at the centre of a trans-Atlantic dispute over the development of 5G networks by China’s telecommunications giant, Huawei,

Washington worries that Huawei’s alleged ties to the MSS – China’s spy services – would seriously compromise intelligence sharing between the Western allies. The European Commission has also expressed its concerns about Huawei’s report makes reference to oversight measures and regulations rather than an outright ban of Chinese companies from taking part in the development of 5G infrastructure.

Sources close to the Italian government claim that the confusion surrounding the content of the memorandum originate by ambiguous statements of individual Italian negotiators. This ambiguity relates to a statement of readiness to sign a memorandum draft that had not as yet been discussed and agreed upon by the cabinet.

In a social media post on 14 March, European Parliamentarian Stefano Maullu of the far-right group Brothers of Italy accused the government of lack of transparency regarding the full content of the memorandum and echoed the same criticism that is increasingly being heard in Brussels and Washington that China needed to be blocked from investing in any strategic infrastructure.

The ports of Genoa and Trieste are currently developing a special relationship with Chinese importers and logistics companies based on concessions rather than the surrender of management as was the case with the Greek Port of Piraeus. Still, the word “colonization” features prominently in an increasingly polarized debate.

A European Commission report, which was backed by European Commission President Jean-Claude Juncker and the EU’s Foreign Policy chief, Federica Mogherini, labelled China an “an economic competitor and systemic rival” and called for EU-wide regulatory oversight mechanism that would keep a close eye on Beijing’s activities in Europe.

The Commission has urged the bloc’s 28 members that they refrain from making agreements with Beijing on a bilateral level in order to approach the Chinese Communist Party with a united European front.

The White House recently called the One Belt, One Road project a “made by China, for China” initiative and expressed the opinion that the deal would not have “sustained economic benefits” for the Italian people.

The Chinese proposal is being seen as a test for Italy’s two most crucial alliances, the EU and NATO. Conte recently told the press that the memorandum was “perfectly compatible” with Italy’s position in NATO and Europe and that the country is not under the threat of being “colonised” by China.

Deputy Prime Minister Matteo Salvini is quoted as saying that the memorandum was mostly about supporting Italian companies that invest abroad rather than creating protectionist measures in Italy.

The European Commission’s view that engagement with China is desirable, but only under a European regulatory framework, was also expressed by Professor Corrado Clini, the former environment minister of the Mario 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 a purely “symbolic” (blame game) rather than a substantive discussion on an EU-China deal that would set the rules of the game.

“This agreement does not contain anything new in its 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, as well as 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 forge a closer relationship with China. Similar Memorandums of Understanding with Beijing have been signed by Croatia, the Czech Republic, Hungary, Greece, Malta, Poland, Slovenia, and Portugal.

“My understanding of the MoU is that it consolidates previous bilateral cooperation agreements rather than opening new pathways. 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,” according to 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, “China wants access to the Single European Market, not bits and pieces of it. In this context, it is true that China seeks access to strategic infrastructures, like ports, but these assets are only useful as platforms if they are compatible with the overall policy framework and can facilitate access; otherwise, they are not strategic.”

Admittedly, Italy is not just another EU member, but a G7 economy. Having arranged an official visit, it appears talks are too advanced to back off after China’s Foreign Minister Wang Yi called on Italy and the EU to affirm their independence and sign the Memorandum of Understanding

Italy still intends to sign the Memorandum, but a leaner and more edited version than the one leaked to the press in recent days

Diplomatic sources and the Italian government 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, an assertion backed by the undersecretary of the ministry of foreign affairs, Gulielmo Picci.

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