The Belt and Road Initiative (BRI), also known as One Belt One Road (OBOR), as the Silk Road Economic Belt or even as the 21st century Maritime Silk Road has been the most concrete demonstration of China willingness to expand trade and commerce worldwide. The BRI is an infrastructure development adopted by Chinese government in Asian, European and African countries. The massive project was first announced in 2013, during Xi Jinping official visits to Indonesia and Kazakhstan and was thereafter promoted by Li Kequiang.
The project involves the construction of land roads, maritime roads, railroads, oil pipelines and gas pipelines. More precisely, the Silk Road Economic Belt (SRB) is the overland interconnecting infrastructure corridors located around 60 countries in Asia, Europe, as well as Oceania and East Africa; it includes countries located on the original Silk Road and further expands its reach to South Asia and Southeast Asia. The Maritime Silk Road comprises the sea route corridors from South Asia to Oceania, Africa and Europe that go across different bodies of water, from the South China Sea to the South Pacific Ocean, from the Indian Ocean to the Mediterranean Sea. Moreover, the Ice Silk Road would lead to a collaboration between China and Russia to originate a Northern Sea Route in the aim to develop arctic shipping routes. Lastly, the Super Grid project is intended to develop six high voltage electricity grids across China, Northeast Asia, Southeast Asia, South Asia, Central Asia and West Asia.
It is worthwhile noting that this project would not only lead to transportation connections between different countries but also to a construction of a unified market in which there would be an exchange of cultures and traditions, blending all the eastern part of the planet and allowing an exchange of technology, talents and capital. The investment required to conclude this project would amount, according to the World Pensions Council, to US$900bn and would mostly be finance by means of issuance of debt instruments, in addition to Chinese huge investments. The project has already benefitted the countries involved: indeed, it has produced an increase in trade between China and the countries along the belt, as well as international relation development and infrastructure expansion.
The project involves the construction of land roads, maritime roads, railroads, oil pipelines and gas pipelines. More precisely, the Silk Road Economic Belt (SRB) is the overland interconnecting infrastructure corridors located around 60 countries in Asia, Europe, as well as Oceania and East Africa; it includes countries located on the original Silk Road and further expands its reach to South Asia and Southeast Asia. The Maritime Silk Road comprises the sea route corridors from South Asia to Oceania, Africa and Europe that go across different bodies of water, from the South China Sea to the South Pacific Ocean, from the Indian Ocean to the Mediterranean Sea. Moreover, the Ice Silk Road would lead to a collaboration between China and Russia to originate a Northern Sea Route in the aim to develop arctic shipping routes. Lastly, the Super Grid project is intended to develop six high voltage electricity grids across China, Northeast Asia, Southeast Asia, South Asia, Central Asia and West Asia.
It is worthwhile noting that this project would not only lead to transportation connections between different countries but also to a construction of a unified market in which there would be an exchange of cultures and traditions, blending all the eastern part of the planet and allowing an exchange of technology, talents and capital. The investment required to conclude this project would amount, according to the World Pensions Council, to US$900bn and would mostly be finance by means of issuance of debt instruments, in addition to Chinese huge investments. The project has already benefitted the countries involved: indeed, it has produced an increase in trade between China and the countries along the belt, as well as international relation development and infrastructure expansion.
But why is the project considered so controversial? Some believe that it would ease and speed up the rise of a China-centred trading network and, thus, the country dominance in global affairs. Moreover, the road would bring major improvements of Beijing strategic and military influence. Participating to the project would imply taking the side of China in a global trade war that is a more current issue than ever. It could also lead to significant levels of indebtedness, which could be difficult to relieve in the future. Zhang Yesui commented on this last aspect stating that “China takes the issue of debt very seriously and within a project the Chinese side never imposes things nor, least of all, creates debt traps. Of course, like any international co-operation, some problems and challenges may crop up. With experience it will improve.”
A significant number of countries declared their participation, but ended up withdrawing it because of changes in government or financial status of the country. These include Maldives, Myanmar, Malaysia and Pakistan.
It is worthwhile understanding what is the stance that Italy has taken. The country will probably be the first G7 country to endorse the initiative. Michele Geraci, undersecretary in the economic development ministry, stated that Rome is planning to sign a Memorandum of Understanding to support the infrastructure programme by the end of March, during a visit to Italy by Chinese president Xi Jinping. The president arrival was scheduled for March 22nd and, during the following days, he would have met Sergio Mattarella and Giuseppe Conte, Italy’s prime minister.
Behind Italy willingness to sign a Memorandum of Understanding (MOU) there are commercial reasons: Mr Geraci said that the aim is to “make sure that the ‘Made in Italy’ products can have more success in terms of export volume to China, which is the fastest growing market in the world.”
This move has obviously alarmed the White House and Brussels. The White House stated that this action is not likely to improve the Italian economic position but could harm the country’s international image and reputation. Critics to this decision have also emerged within the Italian government from Guglielmo Picchi, undersecretary of state for foreign affairs and international cooperation, who called for “further reflection”. Moreover, an EU spokesperson said all EU states should ensure consistency and this would not be the case if some countries, like Italy, signed the MOU and others, EU included, did not.
In general, a MOU is not binding. However, it would certainly be considered a signal of cooperation between Italy, China and the other countries involved. The BRI is not a multilateral organisation nor a trade agreement imposing clear rules and cannot, therefore, admit members. By signing a MOU a country does not become a member and is not forced to build infrastructures in order to support the project, although this actions tend to follow the signing.
Is Italy going to sign the MOU and, if yes, is the signing going to be seen as the country was supporting China in a global trade war or is it going to pass unnoticed? We will have these and more answers after Xi arrival in Italy. For now, it is just a theme worthwhile following.
Giulia Galli
A significant number of countries declared their participation, but ended up withdrawing it because of changes in government or financial status of the country. These include Maldives, Myanmar, Malaysia and Pakistan.
It is worthwhile understanding what is the stance that Italy has taken. The country will probably be the first G7 country to endorse the initiative. Michele Geraci, undersecretary in the economic development ministry, stated that Rome is planning to sign a Memorandum of Understanding to support the infrastructure programme by the end of March, during a visit to Italy by Chinese president Xi Jinping. The president arrival was scheduled for March 22nd and, during the following days, he would have met Sergio Mattarella and Giuseppe Conte, Italy’s prime minister.
Behind Italy willingness to sign a Memorandum of Understanding (MOU) there are commercial reasons: Mr Geraci said that the aim is to “make sure that the ‘Made in Italy’ products can have more success in terms of export volume to China, which is the fastest growing market in the world.”
This move has obviously alarmed the White House and Brussels. The White House stated that this action is not likely to improve the Italian economic position but could harm the country’s international image and reputation. Critics to this decision have also emerged within the Italian government from Guglielmo Picchi, undersecretary of state for foreign affairs and international cooperation, who called for “further reflection”. Moreover, an EU spokesperson said all EU states should ensure consistency and this would not be the case if some countries, like Italy, signed the MOU and others, EU included, did not.
In general, a MOU is not binding. However, it would certainly be considered a signal of cooperation between Italy, China and the other countries involved. The BRI is not a multilateral organisation nor a trade agreement imposing clear rules and cannot, therefore, admit members. By signing a MOU a country does not become a member and is not forced to build infrastructures in order to support the project, although this actions tend to follow the signing.
Is Italy going to sign the MOU and, if yes, is the signing going to be seen as the country was supporting China in a global trade war or is it going to pass unnoticed? We will have these and more answers after Xi arrival in Italy. For now, it is just a theme worthwhile following.
Giulia Galli