Italy jumps aboard the BRI train

Guiseppe Conte, the Italian prime minister, has confirmed growing speculation that his country was considering formally endorsing China's Belt and Road Initiative, or BRI, which would make it the first major European Union economy to do so.

At a recent event in Genoa, Conte said he regards BRI as "an opportunity for Italy and for Europe". He said he hoped to attend the second Belt and Road Forum for International Cooperation in Beijing in late April.

His remarks came ahead of a diplomatic charm offensive to Europe this month by President Xi Jinping, leading to expectations that some progress on the BRI between the two countries might come during the course of that trip.

Italy's populist coalition government would be the first in the G7 leading Western economies to embrace the opportunities of BRI. Among its European G7 partners, the Chinese initiative has had a mixed reception, while in the United States the Trump administration has been openly hostile.

The US national security council spokesman Garrett Marquis warned Italy on Twitter against lending "legitimacy to China's infrastructure vanity project".

Beijing has dismissed Washington's interventions. China's Foreign Minister Wang Yi, noting that the China-Europe relationship sometimes suffers external interference and distraction, said he hoped for more dialogue with the European side.

"We believe that Europe, as a key force in the world, will keep its fundamental, long-term interests in mind and pursue an independent, consistent and forward-leaning China policy," Wang said.

Whatever Washington may think, and despite the reservations of some of its EU partners, the Italian government clearly sees the economic benefits of closer ties with China.

Michele Geraci, undersecretary for economic development, told the Financial Times: "We want to make sure that 'Made in Italy' products can have more success in terms of export volume to China, which is the fastest-growing market in the world."

In the absence of a formal EU-wide stance on how to respond to the BRI, Italy has clearly opted to go its own way. The EU, as a bloc, does not have a direct role in BRI. At the end of this month, member states are set to debate a common approach to Chinese investments into Europe.

US policy under Trump has tended to view international relations from a "win-lose" perspective; any initiative that favors a greater role for China in global trade and development is seen as automatically negative for the US.

The Europeans in general take a more balanced view. To a greater or lesser degree, they have nevertheless expressed concern that the massive BRI infrastructure projects being built and financed by China along the Belt and Road could impose an unsustainable debt burden on the countries involved.

Western European politicians also worry that China's growing involvement in eastern European countries, via BRI agreements, potentially divides the continent.

In an era of growing economic nationalism in the West, even free-market governments such as Germany are shifting toward a more interventionist policy to protect against perceived Chinese competition.

Germany's main business lobby this year publicly called for a tougher approach to competition from China's "State-dominated economy" in the form of takeovers by Chinese companies, particularly in the tech sector.

Italy, where a surge of anti-establishment populism brought a right-wing dominated, eurosceptic government to power, is already something of a maverick in the EU. Faced with grave economic challenges, it has decided to follow its national interest on China and break with the cautious European approach to BRI.

Responding to Washington's warning against a deal with Beijing, Italy's Deputy Prime Minister Luigi Di Maio said: "I have heard the alarm being raised from the US … about this deal on the Silk Road that Italy wants to sign with China.

"Let it be clear that, if we are looking at the Silk Road towards China for our exports, it is not to strike a political deal with China but only to help our companies."

China's project to revive the land and sea routes that link Asia, Europe, Africa and beyond does not involve membership of a formal pact. The sort of memorandum of understanding the Italians hope to sign with Beijing would simply outline a framework of cooperation between the two sides, including on investment.

"Italy is an independent country," Foreign Minister Wang stressed when asked about the Rome government's intentions. "We believe you will stick to the decision that you independently made."

On an economic level, China has an interest in Italy's ports, key staging points for East-West trade, as well as extending its investments in Italian high-tech and even luxury brands, highly in demand at home.

From Italy's perspective, a greater engagement with China offers a leg up for its struggling economy.

As Italy's Economy Minister Giovanni Tria expressed it in December at an Asia forum in Rome: "Italy must be actively involved in the process of (BRI) integration, not only to realize all possible advantages of participating in major infrastructural projects, but also in the longer term to maintain a strategic position in the trade routes of the BRI.

"The BRI is a train that Italy must not miss."