Italy Throws Curveball: Withdraws from Belt and Road Initiative, Shakes up Global Trade Landscape
Italian Prime Minister Giorgia Meloni surprises by announcing Italy's plan to withdraw from the Belt and Road Initiative (BRI), intending to revitalize a strategic partnership agreement with China instead. This decision deals a setback to Chinese President Xi Jinping and adds pressure on the BRI.
In a surprising move, Italian Prime Minister Giorgia Meloni has announced Italy's plan to withdraw from the Belt and Road Initiative (BRI) during a meeting with Chinese Premier Li Qiang at the G20 summit. Italy, the only G7 nation to sign up for the BRI, aims to minimize any backlash from Beijing by revitalizing a strategic partnership agreement with China, which was first signed in 2004.
This decision comes as a setback to Chinese President Xi Jinping, who is set to host world leaders for the third Belt and Road forum in Beijing. Italian media reports suggest that the final decision on quitting the BRI has not yet been made, but Meloni reassured that it would not compromise the relations between Italy and China.
Italy's foreign minister, Antonio Tajani, had previously criticized the BRI for failing to meet Italian expectations. Defense minister Guido Crosetto also described Italy's decision to join the initiative as an "improvised and atrocious act." Prime Minister Meloni herself has repeatedly expressed regret over the BRI deal, referring to it as a big mistake that she intends to correct.
Italy's primary intention in joining the BRI was to attract investments and expand access to China's vast market. However, the trade deficit with China has doubled since Italy joined the initiative, leaving the country with little benefit. With this in mind, Italy is reevaluating its partnership with China as other countries involved in the BRI are also reconsidering their positions.
This announcement adds further pressure on President Xi, who is facing rising defaults and a slowdown in new investments within the BRI. Italy's exit from the initiative signifies a significant blow, as the country sought to leverage its political influence to attract Chinese investments.
However, with no substantial changes in the trajectory of Italy-China economic ties, Italy's decision to exit the BRI is seen as a necessary step to address their growing trade deficit. As Italy seeks to revive its strategic partnership agreement with China, it remains to be seen how this decision will impact the broader dynamics of global trade and infrastructure plans.
