Italy’s Di Maio tries to reassure Washington after becoming first G-7 country to join China’s massive Belt and Road initiative
- Italy on Saturday became the first Group of 7 country to join China’s expansive Belt and Road Initiative, drawing concern from the U.S. and European allies.
- Chinese President Xi Jinping’s visit to Rome saw a total of 29 deals signed, altogether worth $2.8 billion.
The raft of investment deals that Italy’s leadership has just signed with Beijing as part of its massive Belt and Road program is “nothing to worry about,” Italian Deputy Prime Minister Luigi Di Maio told CNBC.
“We are maximizing all precautionary measures, and I want to tell the U.S., and I will tell them as well in next week’s visit, that they are our allies, and that we understand their concerns. But the contents of the MOU (memorandum of understanding) that we are signing tomorrow contains nothing for them to worry about, nothing relating to 5G or any agreement on strategic telecommunications,” Di Maio told CNBC’s Joumanna Bercetche on Friday just before the signing.
Italy on Saturday became the first Group of 7 country to join China’s expansive Belt and Road Initiative (BRI), drawing concern from the U.S. and European allies.
Chinese President Xi Jinping’s visit to Rome saw a total of 29 deals signed, altogether worth 2.5 billion euros ($2.8 billion). They were focused on agricultural, finance and energy sectors, and opened up new access to the Chinese market for major Italian energy and engineering firms.
Western critics warn of Chinese debt traps and describe the initiative as a ploy to expand geopolitical and strategic influence, while Beijing pursues links to Europe and Africa via South Asia and the Middle East to expedite and increase the export of Chinese goods.
Italy’s economy fell into recession at the end of 2018, and the collapse of its Genoa Bridge last August drew attention to the dire state of its infrastructure. It has one of the highest levels of debt in the EU, and the audacious spending plans announced by its right-wing government after last year’s elections were pared back after disputes with the rest of the EU.
Still, the deputy prime minister dismissed notions that his government was aiming for greater Chinese purchases of Italian bonds and focused on the benefits the deals would bring for Italian businesses.
“All the agreements that we are about to sign are based on the possibility of ‘Made in Italy’ to go to China, for our companies to export to China, after many years where ‘Made in China’ had been coming to Italy,” he said. “We are reversing the trend and rebalancing our trade flows — but there isn’t any intent on making any pacts on financial support relating to goods, to the Treasury, or to government bonds.”
“We are not looking to ask China for help with our government bonds,” he added. “Instead, we are looking to advance our own agenda and create more jobs in Italy by increasing our exports to China.”