Xi Arrives in Italy to Sign Landmark Deal as EU Mulls Stronger Action Against China

March 21, 2019 Updated: March 21, 2019

Chinese leader Xi Jinping arrived in Rome on March 21, beginning a three-day visit. In a move that worries the United States and its allies, Xi is set to sign an accord to make Italy the first major democracy to join China’s massive One Belt, One Road initiative.

Italy, which seeks new export deals to boost its stalled economy, will become the first major industrialized nation in the Group of Seven to join the multi-billion-dollar project, which is designed to widen Beijing’s economic and geopolitical reach.

Meanwhile, European Union leaders are mulling a more defensive strategy on China ahead of an EU–China summit on April 9 to discuss concerns about the regime’s unfair trade and investment practices. This marks the first time the EU has discussed at the highest level how to deal with the communist regime.

Italy

Xi will meet Italian President Sergio Mattarella on March 22 and is set to sign the memorandum of understanding (MOU) with Prime Minister Giuseppe Conte on March 23 before traveling to the Sicilian capital Palermo.

More than 30 deals, worth up to 7 billion euros, are also expected to be agreed upon during the trip in an array of sectors including infrastructure, machinery, and finance.

Michele Geraci, undersecretary of the Italian economic development ministry, wrote in a Financial Times op-ed that Italy’s Belt and Road agreement with China could be a blueprint for other European countries.

However, the prospect of the accord has caused ructions both within the coalition government and among Italy’s allies—notably in Washington, where the White House National Security Council urged Rome not to give “legitimacy to China’s infrastructure vanity project.”

On the eve of his visit, Xi penned an article titled “A Strategic Pact with Italy” in Milan newspaper Corriere Della Sera, celebrating the deal while drawing upon the two countries’ cultural and historical ties.

The Chinese leader wrote that the deal includes contributing to Italian port building projects, and launching new initiatives in the fields of “navy, aeronautics, aerospace, and culture … [to] develop the potential for cooperation in port logistics, maritime transport, telecommunications, and the medical-pharmaceutical sector.”

Xi previously published a letter to teachers and students from Convitto Nazionale, a high school in Rome, on March 17 in which he encouraged the students to go to China to pursue their dreams, and become future China–Italy envoys.

While Xi did not state which ports fall under the agreement, Conte previously indicated that its eastern coastal city of Trieste and western coastal city of Genoa, which houses Italy’s largest port, are likely candidates for funding.

The South China Morning Post reported on March 19 that four Italian ports will be funded by Beijing: Genoa, Trieste, Palermo, and Ravenna.

Italian transportation networks, including ports and railways, are considered by Beijing to be important for its maritime economic corridor under the Belt and Road project, linking southern Europe with ports in Southeast Asia and eastern Africa—eventually reaching China.

However, Beijing’s initiative has been criticized for burdening developing countries with massive loans that they cannot pay off. This “debt trap” has already occurred in Sri Lanka and the Maldives due to Belt and Road projects.

Monaco and France

Xi Jinping will visit Monaco on March 24 before heading to France on the same day.

Monaco Telecom, the main telecommunications provider in the city-state, signed an MOU with Chinese telecom giant Huawei on Feb. 27 pledging that the two companies will work together to develop Monaco’s 5G capabilities, including for the Internet of Things, Big Data, and cloud services.

Meanwhile, the U.S. administration has warned its EU allies against using Huawei telecommunications equipment in next-generation wireless networks, which it says could be used by Beijing for espionage purposes.

Unlike its southern neighbor, France will not sign on to the One Belt, One Road project, although the two countries are set to sign deals in areas including energy, transportation, agriculture, and finance.

French president Emmanuel Macron said in early March that China would buy 184 Airbus A320 jets, worth around $18 billion. Chinese media have reported the contract with Airbus will be signed during the visit.

EU and China

On the same day of Xi’s arrival in the continent, European Union leaders in Brussels considered adopting a more defensive strategy toward China, having branded on March 12 the world’s second-largest economic power a “systemic rival.”

The European Union has grown increasingly frustrated by what it sees as China’s slowness to open its economy and by a surge of Chinese takeovers in critical EU sectors, accusing it of distorting local markets.

French President Emmanuel Macron spoke of a “European awakening” that China is seeking to produce sophisticated products that will compete with those made in Europe. The EU’s trade chief Cecilia Malmstrom, a Swedish liberal, meanwhile argued that the international economic order had changed.

“Since the beginning of my mandate, I’ve been calling for a real awareness and for the defense of European sovereignty,” Macron told reporters as he arrived for the summit. “I’d say that finally we have it for an issue as important as China.”

According to a draft April summit statement seen by Reuters, the EU seeks deadlines for China to make good on trade and investment pledges that have been repeatedly pushed back.

Reuters contributed to this article. 

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