Uncertain Future: Italy Contemplates Exiting China's Belt and Road Initiative Amidst Disappointing Trade Results

China and Italy are working to improve their trade and investment ties, according to the Chinese commerce ministry. Italy, the only Group of Seven nation to join China's Belt and Road Initiative (BRI), is considering withdrawing from the program due to perceived inadequate benefits. Italy has until December to make a formal decision, or its membership will automatically roll over for another five years. The BRI is a massive infrastructure project aimed at rebuilding the historic Silk Road and connecting China with Asia, Europe, and beyond.

Despite Italy's concerns, China remains committed to deepening cooperation with Italy and exploring potential opportunities for trade and investment. The two countries signed a memorandum of understanding for BRI construction during a visit by Chinese President Xi Jinping to Rome in 2019. However, trade flows between the two nations have not improved as anticipated by Italy. Italy has expressed dissatisfaction with its trade deficit with China, which grew by €22.3 billion ($23.9 billion) between 2019 and 2022, according to the Italian Ministry of Foreign Affairs. Italian Deputy Prime Minister Antonio Tajani raised this issue during a meeting with China's Foreign Minister Wang Yi in Beijing, stating that the Silk Road did not deliver the expected results.

China has invested in 24 projects in Italy from 2014 to 2020, totaling $22.27 billion. These projects range from shares in renowned football clubs AC Milan and Inter Milan to investments in telecoms companies and the postal service. Losing Italy, once considered the terminus of the ancient Silk Road, would be diplomatically embarrassing for China. The country had planned to showcase the achievements of the Belt and Road Initiative at an international forum in Beijing in October, where representatives from 90 confirmed countries are expected to attend.