Italian Dangerous Gamble: The Belt and Road Initiative and Growing Chinese Influence

Chinese president Xi Jinping’s visit to Italy marked an important shift in Rome’s policy towards the communist regime. Signature of Memorandum of Understanding with Belt and Road Initiative (BRI) is just evidence of this shift. Threats of China, its soft-power projection and potential control over strategic infrastructure in Europe are imminent. If this issue is not seriously addressed soon, EU countries might face much more difficult security decision in the future.

Chinese President Xi Jinping visited Italy between 21st and 23rd of March. According to expectations, Italy and China signed Memorandum of Understanding with the Chinese Belt and Road Initiative (BRI). This enormous project is currently causing controversies as it is used by the Chinese government as a political tool to gain control over strategic infrastructure and to put pressure on national governments.

The new approach of Giuseppe Conte's government to the sensitive issue of Chinese investments in the EU is in a way different from the rest of the member states. Even though many of the countries are already receiving Chinese investments, none of them signed the Memorandum of Understanding and Italy is also the first G7 country to do so.

 

Italy’s approach to the issue is a gamble because economic ties with China through infrastructure already proved to be a rather dangerous business.

 

Italy hopes to gain much-needed investments and other economic benefits from China to strengthen its stagnating economy. However, the problem comes with Chinese goals and expectations. Apart from the international promotion of its strategic policy, China might want to increase its influence over the member states in the EU. Italy’s approach to the issue is a gamble because economic ties with China through infrastructure already proved to be a rather dangerous business. It isn’t a coincidence that the BRI is targeting countries with low economic growth and promises great benefits to struggling governments.

Stronger economic ties with China might make Italy dependent on Chinese investments, which would grant Beijing more political influence over Italy. The pervasion of Chinese companies aligned with the state into strategic infrastructure is also dangerous because of the close cooperation between the countries inside the EU. Member states often share important information about both security and economic issues, which may become vulnerable. Moreover, China is always eager to get its hands on know-how and modern technology. An economic and technological merge between Chinese and Italian companies thus might result in loss of competitive advantages of European companies.

 

Countries of the Visegrad Four are also a target of Chinese investments and even seem to be particularly vulnerable as their top politicians showed a very positive attitude towards China in the past. 

 

Italy is not alone in this difficult situation. Countries of the Visegrad Four are also a target of Chinese investments and even seem to be particularly vulnerable as their top politicians showed a very positive attitude towards China in the past. The Czech president Milos Zeman and the Hungarian Prime Minister Viktor Orbán stands out in this regard. For example, Zeman travelled to China accompanied by businessmen to create economic ties with Chinese companies and also received a visit by the Chinese president in 2016. Prime minister Orbán also endorsed Chinese investments in Hungary and claimed that Hungary is prepared to turn to China if the financial support from the EU is not sufficient.  

The Belt and Road Initiative was already endorsed by many countries. However, it often didn’t turn out to be as beneficial as those countries expected. First, massive Chinese loans helped to build critical infrastructures such as ports or roads and railroads. When countries were unable to pay, China offered them a solution - to hand over the newly build infrastructure in exchange for the removal of some of the debts. The typical examples of such strategy are the Sri Lankan port of Hambantota and potentially also Djibouti, which hosts the first overseas Chinese military base.

 

Gathering intelligence, getting access to new technologies and building dependency on Chinese employers that follow Chinese political goals are imminent threats that Europe has to address.

 

It is important to point out that there is no such thing as a truly private business in China. All Chinese companies are in a way influenced by Chinese political goals. Chinese businesses have to comply with the controversial National Intelligence and Counter-Espionage Laws. These oblige Chinese companies and individuals to cooperate (provide access, information, facilities etc.) with Chinese security forces under the risk of criminal charges.

Italian endorsement for BRI is rather a symbolic act. Unfortunately, it also shows priorities of the Italian government towards its allies in both the US and EU. Immediate economic benefits are to play a more important role in the future. The timing of the Italian decision is also significant as the EU-China summit in April is rapidly approaching.

It is important to understand that Chinese investments, even though a useful tool to boost national economies of the EU member states, might also undermine European security. Gathering intelligence, getting access to new technologies and building dependency on Chinese employers that follow Chinese political goals are imminent threats that Europe has to address. If the European countries are unable to stop the encroachment into their strategic infrastructure and limit Chinese investments, they might face even more difficult decision-making in the future: Whether to comply with Chinese political goals or lose thousands of jobs or, even worse, lose control over their infrastructure.

About author: Pavel Hanosek

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