Italy has buyer’s remorse over China’s Belt and Road

Just three days after Italian Prime Minister Giorgia Meloni met with President Joe Biden at the White House, Italy’s defense minister Guido Crosetto stated that the nation’s 2019 decision to join China’s Belt and Road Initiative (BRI) was both “improvised and atrocious.” According to Crosetto, the government of Guiseppe Conte, leader of the populist Five Star Movement, had signed on to the arrangement expecting to increase Italian exports to China. Instead, Crosetto asserted, the arrangement “led to a double negative result. We exported a load of oranges to China, they tripled exports to Italy in three years.”

Even before Crosetto issued his remarks, it was clear that Rome was developing cold feet over its participation in the BRI. For its part, China was concerned that during Meloni’s Washington visit she would make an announcement regarding Italy’s future participation in its primary international initiative. Both Chinese media and government spokesmen warned of what China’s ambassador to Italy, Jia Guide, termed the “negative impacts” of Italian withdrawal.

In the end, Meloni’s joint statement with Biden did not mention Italy’s possible withdrawal from the BRI. But the statement did note that the two leaders “reaffirm[ed] their commitment to … strengthening economic resilience and economic security, including efforts … to increase our collective assessment, preparedness, deterrence and response to economic coercion.” The unstated reference is unequivocally to China.

Italy is the only member of the Group of Seven advanced industrial economies to have joined the Chinese initiative. It is also the only major European Union member state to do so; the other seventeen states that signed up to the BRI are all smaller economies. The EU itself has come to view the BRI as a serious challenge, however. As Ursula von der Leyen, president of the European Commission, asserted earlier this year, “the Chinese Communist Party’s clear goal is a systemic change of the international order with China at its center. We have seen it with China’s positions in multilateral bodies which show its determination to promote an alternative vision of the world order.” She added, “We have seen it with the Belt and Road Initiative.”

In 2021, the EU, responding to the effect of the BRI throughout the Global South in particular, created what it dubbed “Global Gateway,” which it described as “the EU’s positive offer to partner countries in support of their resilience and sustainable development.” In announcing its creation, the EU pledged to invest 300 billion euros (about $350 billion) between 2021 and 2027 in projects ranging from fighting climate change to health, energy, transport, infrastructure and digitalization.

The funds that the EU has allocated to its project approximate those that Beijing has dedicated to the BRI, about $370 million. On the other hand, European funding pales in comparison to the more than two trillion dollars that Beijing has poured into overseas construction projects and various forms of investment over the past two decades. Nevertheless, Global Gateway signifies that the EU has at least come to recognize that words alone, no matter how forcefully delivered, will not wean any country off the BRI.

China’s flagging economy, caused in no small part to Xi Jinping’s determination to prop up inefficient state-owned enterprises, is also hurting the BRI and creates a real opportunity for the Global Gateway to serve as a credible alternative to the Chinese effort. While Global Gateway consists of a variety of projects, it highlights the EU’s focus on climate issues — in sharp contrast to China’s role as the world’s leading emitter of greenhouse gases. In that regard, in April the EU Commission announced that it was devoting 18 billion euros (about $20 billion) for investment in what it termed “Global Gateway’s priority areas — climate action, clean energy and connectivity.”

After her meeting with Biden, Meloni said that Italy would decide by December whether to remain in the BRI. Europe’s increasing angst over China, its efforts to counter the BRI with a major initiative of its own, and Crosetto’s remarks about the Chinese initiative certainly point to the direction that Meloni’s decision is likely to take. After four frustrating years, Rome finally appears to be suffering from what can only be termed buyer’s remorse. If the EU can keep expanding its own Global Gateway efforts even as the Chinese economy continues to flounder, perhaps other BRI participants will follow Italy’s lead and consider withdrawing from the so-called “flagship project” that Xi Jinping launched with so much fanfare exactly a decade ago.

Dov S. Zakheim is a senior adviser at the Center for Strategic and International Studies and vice chairman of the board for the Foreign Policy Research Institute. He was undersecretary of Defense (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy undersecretary of Defense from 1985 to 1987.