You are here

COMMENTARY

China shows that all roads lead to Rome

CHINESE Foreign Minister Wang Yi took a swipe at Washington over the weekend over the apparent Italian decision to endorse Beijing's Belt and Road Initiative (BRI). The Italian move would be the first time any G7 state has backed the US$1trillion plan, which lies at the centre of a geopolitical struggle between China and the United States for global influence.

The mini-diplomatic earthquake began earlier last week when Italian Undersecretary of Economic Development, Michele Geraci, said that Rome was considering signing an "initial framework" accord with Beijing. This would most likely be timed around President Xi Jinping's visit later this month, currently scheduled for March 22-24, to the country.

While Italy is not always seen as being among the top-tier global powers, part of the reason why the development has such potential significance is Italy's continued systemic importance in Europe. As a G7 country, it is the third largest Eurozone economy and poses perhaps the biggest threat to the single currency area's future because the country has the second-biggest debt load in the bloc.

Last week's news, which has predictably irritated Washington, drew an immediate rebuke from Garrett Marquis, a US National Security Council spokesman. In a tweet on March 9, he asserted that there is "no need for the Italian government to lend legitimacy to China's infrastructure vanity project".

sentifi.com

Market voices on:

Yet, it is not just Washington that is concerned, but also Brussels. EU officials are increasingly conscious of Beijing's influence across the continent, including the so-called "16+1" initiative of China and key countries in Eastern and Central Europe. Buttressing this, a number of EU states have already signed MOUs with China on BRI, including Croatia, the Czech Republic, Hungary, Poland, Greece, Malta and Portugal.

Like Washington, Brussels has reservations about BRI, not least given wider frustrations over Beijing's perceived slowness to open up its own economy, and a wave of Chinese takeovers of European firms in key industries. Yet, Brussels has declared it will cooperate with the grand initiative "on the basis of China fulfilling its declared aim of making it an open platform which adheres to market rules, EU and international requirements".

As well as being divisive with Washington and Brussels, Mr Geraci's comments prompted an apparent split in the Italian government itself. Take the example of Deputy Minister for Foreign Affairs and International Cooperation, Guglielmo Picchi, who commented that "at the moment, I do not think we should proceed with the signature".

Ambitious plans

Whatever the true position of the Italian government, it is clear that Rome has been involved in significant discussions with Beijing. And, in the face of Washington's slapdown of its longstanding ally, Beijing itself hit back on Friday with Mr Wang saying that "Italy is an independent country. We trust that you'll stick to the decision you have independently made" on BRI.

Mr Wang's frosty response, and the concern about BRI in much of the West, stems from its immensely ambitious nature. Beijing has big plans to boost trade and stimulate economic growth across Asia, Africa and beyond by building massive amounts of infrastructure and connecting it to countries around the globe.

According to some forecasts, the Chinese initiative has the potential to overshadow even the legendary Marshall Plan given that it potentially comprises about 65 per cent of the world's population, one-third of its GDP and helps to move about a quarter of all its goods and services. Indeed, some assert Beijing's scheme as the biggest development push in history.

Take the example of Pakistan, for instance, where Beijing has already made commitments of around US$60 billion under BRI. While this is to be largely spent on infrastructure, it has cemented warming geopolitical ties with Islamabad, a previous longstanding US ally during the Cold War.

In this context, one of the key reasons why Washington will have been so irked by this week's revelations from Rome is that the Trump team had been trying to form its own strong relationship with the populist government there. Indeed, Italian Prime Minister Giuseppe Conte, who met with Donald Trump last year at the White House, was perceived by some to be emerging as the US president's strongest supporter in Western Europe.

Mr Trump last year declared Mr Conte "a really great guy" and that he "will do a great job - the people of Italy have got it right". And this political affinity appeared to rest not just on apparent personal chemistry, but also the alignment of their policy positions of key issues like Russia.

Take the example of Russia where Mr Conte tweeted his backing for Mr Trump's remarkable call last June for Moscow to re-enter the G7, rejected summarily by all of the other members of the club of western powers. The Italian premier's backing for the US president on this controversial issue reflects the fact that the two anti-establishment political parties which comprise the Italian government - The League and Five-Star - have long sought a re-evaluation of Rome's relationship with Moscow, including calling for the lifting of EU sanctions.

While the Trump team therefore has particular perceived reason to feel vexed, should Mr Conte sign the MoU with Mr Xi, concern about BRI is bipartisan in Washington given the concern of many Democrats too about growing Chinese international influence. This was underlined, during the Obama administration, when Washington raised concerns about the degree to which London was then perceived to be cosying up to Beijing under the previous government of David Cameron.

Political breakthrough

The then-Chancellor of the Exchequer George Osborne pledged to make the United Kingdom "China's best partner in the West". This ruffled the feathers of the Obama administration following the UK's decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB), which is being championed by Beijing as a potential alternative to the World Bank.

An unnamed senior Obama administration official was widely quoted in 2015 to be "wary about a trend towards constant accommodation of Beijing which is not the best way to engage a rising power". Meanwhile an official White House statement urged London to "use its voice to push for adoption of high standards".

Taken overall, Italy's potential endorsement of BRI would be a political breakthrough for Beijing, should it officially happen later this month. This is especially so given that the White House had perceived that the populist stripe of the administration in Rome had brought new spice to bilateral bonds following the positive initial meetings last year between Mr Trump and Mr Conte.

  • The writer is an Associate at LSE IDEAS at the London School of Economics.