Italy Joining China's Belt And Road Initiative Shows Tide Is Turning For The West
Italy said yes, others might follow. This article for Outlook talks about China’s Belt Road Initiative, and how its focus is sifting from under-developed and developing countries to the more powerful nations.
The Silk Route established over 2000 years ago by the Han dynasty, meandered thorough Eurasia bringing in spices and silk all the way from China, and returning with gold, ivory and glass. The trade route crawled thousands of miles deep into Europe, connecting China to the Mediterranean. Inspired by the ancient network, President Xi Jingping announced the Belt Road Initiative (BRI) in 2013 - undoubtedly the most ambitious infrastructure investment project in world history. The multi-billion dollar proposal to connect Asia with Africa and Europe has generated enough conversation, over the past few years. And despite both polite reservations and strident criticism, the project ploughs on, although making some changes along the way.
BRI was originally extended to developing and least developed countries, those that would be more amenable to Chinese terms in return for Chinese investments. But that is changing. The world is aware of the growing infrastructure deficit, and the limitations of the developed countries to offer a broad-based global solution - both in terms of vision and financing. China’s BRI seeks to address that and is now extending itself into Europe.
While the powers within the EU were still trying to figure out their BRI strategy, China went ahead and signed bilateral deals with the smaller eastern and central European countries, a 17+1 group that now includes Greece. The deals at that time did not attract much attention because of the small sizes of the participating economies - the financial numbers were dwarfed by some of China’s other mega investment projects in Asia and Africa. Also since many of these countries have had a Communist past, which took time and effort to overthrow, they were seen as unlikely natural partners to Beijing. But then, a few weeks ago, Italy signed the dotted line. That raised many worried eyebrows. It was unexpected for a G7 country to do so, and especially without a nod from Brussels.
Interestingly just days before Italy said yes, a report by European Commission President Jean-Claude Juncker labelled China as a ‘systemic rival’, and a week earlier, the White House called the BRI initiative a ‘made by China, for China’ kind of project. Rome was warned, but Rome was in no mood to listen. They went ahead and signed an MoU worth over 2.5 billion Euros. It was not the first and will not be the last European country to do so.
Last week, China hosted the second international forum on Belt Road Initiative (BRI), inviting a host of leaders from across the world. The turnout was impressive with 36 heads of state in attendance. It was no surprise that top leaders from 9 out of the ten ASEAN states were present along with that of five central Asian republics, interestingly the event also saw top-level attendees from Europe, including Austria, Cyprus, Portugal and so on.
Europe is aware of the shift of the global centre of economic activity from the Atlantic to the Pacific, and they want to be a part of it. In the recent past, there have been frequent high-level exchanges between China and Europe. Reservations on China’s growing clout, human right violations in the project and the potential ‘debt traps’ keep growing, but practical considerations have begun to take over. Europe has deep historic ties with the US, which has very strong misgivings about BRI, but then there are economic opportunities being offered that cannot be ignored. After all, it is not the US, but the EU that is China’s biggest trading partner, with over 650 billion dollars of trade in 2017.
The objections to Italy joining are not limited to why anymore, but more in the nature of how. What are the terms of the agreement? Are safeguards built in and so on. Italy is not the only one, there will be other nations considering the same. Brexit and immigration issues have exposed the chinks in the European Union, and at present, all member states are not necessarily speaking in one voice. The EU is aware that the absence of a comprehensive Sino-EU framework will hurt. Member states of the EU risk being relegated to the weaker partner status if they engage with China on an individual basis. EU as a bloc will naturally have stronger bargaining power.
China on its part is decided to present a more accommodating face. Compared to its earlier announcements, this time at the BRF, President Xi went out of his way to counter mounting criticism of his pet project by reiterating his commitment to transparency. Responding to concerns he talked about ‘shared benefits’ and ‘joint contributions’ as the way forward, also describing his proposal as a ‘high-quality, sustainable, risk resistant, reasonably priced, and inclusive infrastructure.’
Both sides might just be tentatively finding a middle ground to approach and accept one another. As more and more member-states of the EU join hands with China, it will no doubt significantly enhance the Chinese influence in the world order. Although estimates vary, the state-sponsored campaign is expected to cost about 1 trillion dollars, money that it promises to invest in over 60 countries along its route. Given the precarious situation of the global economy, we will probably see the BRI list grow. After all, it is impossible to ignore something of this size.