Italy to withdraw from China's “Belt and Road” investment pact

EU | May 10, 2023, Wednesday // 14:44|  views

Italy has signaled to the US that it intends to withdraw from China's controversial "Belt and Road" investment pact before the end of the year.

Italian Prime Minister Giorgia Meloni assured US House Speaker Kevin McCarthy during a meeting in Rome last week that while no final decision had been made, her government preferred to withdraw from its role in China's massive "Belt and Road Initiative," reports the Bloomberg agency, citing its sources who were present at the talks.

Italy signed up for the infrastructure initiative in 2019 when Giuseppe Conte was prime minister, becoming the only "Group of Seven" country to become part of the deal. Participation will automatically renew in 2024 unless Rome actively withdraws from the agreement.

China's Belt and Road Initiative has funded $900 billion in infrastructure projects worldwide.

Italy, like much of Europe, has been "caught" in the escalating tensions between Washington and Beijing, which have been compounded in light of Beijing's continued support for Russia. European countries are struggling to balance their desire to engage with China on trade and investment while resisting claims of economic coercion.

A spokesman for Meloni declined to comment on Bloomberg's report, and McCarthy's office did not respond to requests for comment.

Meanwhile, China's foreign ministry stressed that the two countries have had "fruitful cooperation" in trade, manufacturing and clean energy since the signing of the agreement.

"The two countries should make further use of the cooperation potential of the Belt and Road Pact and strengthen mutually beneficial cooperation in all areas," Foreign Ministry spokesman Wang Wenbin told reporters at a regular press briefing on Wednesday.

The US has been actively pressuring Rome to take a public stance on the issue and abandon the pact, sources told Bloomberg on condition of anonymity.

Meloni's diplomatic advisers are still discussing the details and timing of a decision, fearing economic retaliation from China, and nothing likely will be made public before the start of the G7 summit in Hiroshima, Japan, on May 19.

The potential move is closely linked to Meloni's position on Chinese investment in Italy and, in particular, on the upcoming choice of whether to use executive powers to limit the influence of China's Sinochem Holdings Corp., the largest shareholder in tire maker Pirelli & C. SpA, agency sources said. The decision was postponed until the end of May.

Bloomberg reported last month that Italian officials were discussing a range of options as part of talks with Pirelli's investors over the company's ownership structure. The government may take a more neutral stance on the role of Sinochem Holdings as part of the overall decision to exit the Belt and Road.

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Tags: belt and road, China, Italy, EU


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