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Italy: A New Silk Road Between Italy and China – the Belt and Road Initiative

The following post is written by Dante Figueroa, a senior legal information analyst at the Law Library of Congress. He has recently written for In Custodia Legis on the Italian Parliamentary Library; Spanish Legal Documents (15th to 19th Century); and Recent Legislation Enacted by Italy to Tackle COVID-19.

Photo by Flickr user Derell Licht (Oct. 8, 2006), used under Creative Commons BY-ND 2.0).

Over a year ago, on March 23, 2019, Italy signed a Memorandum of Understanding with China to officially become a member of the Belt and Road Initiative (BRI), also known as the “One Belt One Road” (OBOR). Italy and China followed up to their commitments by signing a total of 29 trade and political agreements (19 institutional agreements and 10 commercial agreements) worth about 2.5 billion euros (US$2.8 billion) to implement the so-called New Silk Road Project.

The Ancient Silk Road

The ancient Silk Road was a roughly four-thousand mile route built to facilitate trade between Europe and China running through Central Asia, now modern-day India and Pakistan. German geographer and scientist Ferdinand von Richthofen is credited with coining the name “silk route” (“Seidenstrasse”) in 1877 A.D.

The ancient Silk Road originated between 130 BC—1453 A.C., during the Tang Dynasty, and flourished until the Mongol incursion into Europe led the Ottoman Empire to boycott trade with China, and Europe found the sea route to trade with China directly.

The Silk Road was used for centuries to transport westward Chinese exports of, among other things, gold and other precious metals and stones, tea, china, perfumes, rice, paper and gunpowder. In turn, imports to China included, among other things, horses, saddles and riding tack, grapevines and grapes, dogs and other exotic and domestic animals, animal furs and skins, honey, textiles, slaves, and weapons and armor.

The BRI / OBOR

The Belt and Road Initiative was first announced by Chinese President Xi in 2013 during a visit to Kazakhstan and Indonesia, with a vision of creating an extensive network of railways, energy pipelines, highways, and streamlined border crossings. This initiative pivots around a land and maritime route that encompasses 65 countries and involves about 70% of the world’s population. In the case of Italy, the trade deal opens the whole national industrial system to Chinese investment.

Ancient Silk Road Map by Flickr user Patrick Gray (Aug. 20, 2016), used under Creative Commons BY-ND 2.0.

Italy’s Participation in the New Silk Road Project

Italy’s government, led by the Five Star Movement (5 Stelle) signed the memorandum of understanding for the trade deals with the Chinese generally known as the “Economic Silk Road and The Initiative for a Maritime Silk Road for the 21st Century” in March of 2019.

The trade deals call for China’s financing of a large number of infrastructure projects in Italy, together with an incentive to use Chinese-manufactured products. The areas covered by the deals are: energy, finance, agricultural produce, gas and energy, and engineering firms. China’s Communications and Construction Company will be given access to the port of Trieste to enable links to central and eastern Europe. The Chinese will also be involved in developing the port of Genoa.

China has already funded an important number of infrastructure projects in Italy during the last few decades, involving railroads, roads, and ports. The Chinese construction companies have been financed by loans from Chinese banks. In 2019 alone, Chinese imports into Italy were more than double Italian exports into China.

Criticism of the Italy-China Trade Deals

In the past, commentators have strongly criticized the growing economic influence of China over Italy. A prominent Italian political leader has labeled the current trade deals as a form of “colonization” by a foreign government. Specifically, criticism was drawn from the Chinese access to the ports of Trieste and Genoa. Even before the deals were signed, the EU issued a statement on “China’s Growing Economic Power and Political Influence.”

On March 9, 2019, the U.S. National Security Council spokesman commented that Italy was a major economy and that there was “no need for the Italian government to lend legitimacy to China’s infrastructure vanity project.”

The government’s counter-criticism focuses on the fact that Italy is currently experiencing enormous deficits in infrastructure and other key areas of the economy as China offers available capital in vast amounts to meet such Italian needs through the establishment of this new Silk Road, which the Italian government officially joined in March 2019.

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