As tensions are rising between the US and China, now Italy is considering taking sides, by pulling out of China’s Belt and Road infrastructure project, according to a new report from Bloomberg Saturday. Among the G7 nations, Italy is the only one to have signed a memorandum of understanding (MOU) with Beijing on the project. The MOU will expire next year.
As May’s G7 summit approaches, Italian Prime Minister Giorgia Meloni wants to make an official announcement on Italy’s position, but reportedly she is still unsure if the MOU is to be scuttled or renewed with China.
Within Meloni’s administration, views are reportedly varied, with the Brothers of Italy party looking for Italy to abandon the agreement, while others wish to maintain it as it. Although Meloni, who considers the US a close ally, has referred to the memorandum with China as a “big mistake” publicly prior to her election, lately she has spoken more cautiously of the deal.
Originally signed in 2019, the MOU is set to be automatically renewed until March of 2024, unless Meloni affirmatively decides to end it. Although the deal itself has not produced any measurable increase in cooperation between China and Italy, experts have warned that if Meloni chooses to exit it, it will adversely affect relations between the two nations, producing diplomatic and economic repercussions.
Italy and China share strong ties economically. Within the EU, Italy is the third largest importer of Chinese goods and it is the fourth biggest exporter of goods to China, whose population has a particular taste for Italian luxury brands. According to a statement by Chinese Ambassador to Italy Jia Guide last month, over the past three years, bilateral trade between the nations “has set new records, touching €73.5 billion ($81.6 billion) in 2022.”
Meloni’s decision is made more difficult by the deteriorating relations between the United States and China. The growing tensions are impacting nations throughout the EU, where the US is seen as a staunch ally, however trade relations with China are also seen as vitally important. As the US has been attempting to curtail China’s access to sensitive technologies, it has been imploring EU nations to follow suit, However behind the scenes, Beijing has been attempting to thwart those efforts.
Francesca Ghiretti, an analyst at the Mercator Institute for China Studies, said in an interview with Bloomberg, “Italy is stuck between a rock and a hard place, and what to do with the cooperation pact is a real diplomatic conundrum for Meloni. Renewing it would send a very difficult message to Washington, but not renewing it would put a strain in relations with China.”
She added, “At the moment, it seems the [Italian] government is leaning toward not renewing the pact, but in this scenario it will be key to coordinate with the US and other allies to react to a possible response.”
