Hopes high for Italy to jump on board the BRI train

(GT/Luo Xuan)

China and Italy formally established diplomatic relations in 1970. Leaders of the two countries have made frequent visits to each other's countries since then and political mutual trust has been rising continuously. The two countries established a comprehensive strategic partnership in 2004, taking bilateral relations a step further. China proposed the Belt and Road Initiative (BRI) in 2013 and the Italian government has reiterated its willingness to participate in the initiative. Many EU members have thus far joined the BRI's circle of friends. If Italy signs up for the initiative, it will become the first G7 country to endorse the BRI, indisputably adding new strength to BRI-enabled international cooperation.

Meanwhile, as an established EU member, Italy has gradually been at odds with the EU on the matter of fiscal policy and the refugee issue. The high unemployment rate and economic downturn also forces the Italian government to actively explore wider economic cooperation with other countries. If China and Italy seize the chance to cooperate on the initiative, not only will the Italian economy be revived, but the two countries will forge closer ties.

Italy has historically been an important European point on the ancient Silk Road. The abundance of ports and the exceptional geographic location of the Mediterranean country render Italy a natural partner for involvement in the push for the BRI. It makes sense, especially amid a sea change in the world economy and a repositioning in China-EU relations. As a significant economy in the eurozone, Italy's drive to join the BRI will give full play to its role in linking Asia, Europe and Africa, improve connectivity between China and Europe, open up new frontiers in bilateral and regional cooperation, and bring stability and sustainability to the world economy.

Also, cooperation along the BRI routes is set to usher in a new stage of economic and trade ties between the two countries. Presently, Italy is China's fifth-largest trading partner in the EU, while China is Italy's top trading partner in Asia. Bilateral trade totaled $49.6 billion in 2017, an increase of 15.1 percent year-on-year. A breakdown of the data showed China's exports to Italy grew 10.5 percent year-on-year to $29.17 billion in 2017, while its imports rose by 22.2 percent to $20.43 billion.

There is still ample opportunity for the two sides to forge closer trade ties. Italy is in urgent need of Chinese investment in its small and medium-sized business sector, financial innovation, renewable energy and a broad range of infrastructure projects including telecommunications, public roads, railroads and shipping. Transportation, notably ports, and logistics will be a primary focus for bilateral cooperation through the BRI for the foreseeable future.

Furthermore, although Italy has been mired in the international financial crisis and the European sovereign debt crisis, it still takes the global lead in science and technology innovation and mechanical manufacturing, among other fields. It is also China's third-largest source of technology acquisitions in the EU. Freight trains linking Milan, the business capital of Italy and Chengdu in Southwest China's Sichuan Province have been put into service. Besides, the two countries have forged a close bond in culture, education, tourism, law enforcement and regional cooperation, among other areas. It is also among the first batch of countries to sign up to the China-led Asian Infrastructure Investment Bank. All these have laid the groundwork for the two countries to go a step further.

Also worth mentioning is the great importance the Italian government has attached to its relations with China. Italy set up a China Task Force within its industry ministry last August, only two months after its new government was sworn in, in an effort to strengthen its partnership with China in trade and investment. In a fresh pro-BRI gesture, Italian Minister of Economy and Finance Giovanni Tria said at a recent event that the initiative was creating "a circle of virtuous, satisfying and diffuse growth." Cited in a Financial Times report in early March, Tria said that "The BRI is a train that Italy cannot afford to miss."  

China, for its part, will also benefit if Italy jumps on board, in that Europe's law enforcement and environmental protection, which is held to high standards, might be an inspiration to the BRI. High-level trade rules prevalent in the EU will also be expected to enlighten international cooperation along the BRI routes. On top of that, Italy's endorsement of the BRI will undoubtedly serve as a paradigm to inspire other European countries to join the initiative and push China and the EU closer toward a bilateral investment agreement.

The author is an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation.