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Discover the stunning twist as Italy takes a bold step regarding China’s Belt and Road Initiative. Find out why this decision is making headlines worldwide and what it means for global economics.
In a significant development that could pose challenges for Xi Jinping’s Belt and Road Initiative (BRI), Italian Prime Minister Giorgia Meloni conveyed to Chinese Premier Li Qiang that Italy has made the decision to withdraw from the ambitious project. This announcement was made during their discussions on the sidelines of the G20 summit in New Delhi, despite Li’s last-minute efforts to persuade Italy to reconsider its stance.
It’s worth noting that the final decision to exit the project has not been formalized yet, as mentioned by Meloni during a subsequent press conference. She also emphasized that Italy’s decision to potentially leave the BRI would not damage its relations with China. To mitigate any potential fallout, Italy intends to refocus on enhancing its strategic partnership agreement with China, originally established in 2004, aimed at promoting economic cooperation.
Italy’s initial participation in the BRI marked a unique position among the G7 nations. The BRI, inspired by the ancient Silk Road, is China’s global trade and infrastructure initiative.
Italy clarified that its decision was not influenced by external pressures, particularly from the United States, dispelling such claims made in reports. This sentiment was echoed by other Italian sources.
The dissatisfaction with the BRI deal had been mounting within Italy for some time. Italy’s Foreign Minister, Antonio Tajani, had recently expressed that the BRI failed to meet Italian expectations. Italian Defense Minister Guido Crosetto even termed Italy’s participation in the BRI as an “improvised and regrettable act.” Prime Minister Meloni herself has repeatedly referred to the BRI agreement as a “significant mistake” that she intends to rectify.
The BRI agreement was set to renew automatically in March 2024, but Italy’s decision may disrupt these plans. This move poses a fresh challenge for Xi Jinping as he seeks to revitalize the BRI amid increasing defaults and a slowdown in new investments.
Italy’s experience with the BRI had not yielded the expected benefits. Despite joining the initiative to attract investments and gain greater access to China’s vast market, Italy faced a growing trade deficit with China. While Italian exports to China saw a modest increase from 14.5 billion euros to 18.5 billion euros after joining the BRI, Chinese exports to Italy surged significantly from 33.5 billion euros to 50.9 billion euros. Consequently, Italy’s trade deficit with China doubled in just three years, up to 2022.
This decision by Italy to potentially withdraw from the BRI underscores a broader trend where various countries are reevaluating their involvement in the initiative due to its perceived lack of substantial economic benefits.