Why Is Italy Withdrawing From China’s Belt and Road Initiative?

xyx007 · Sep 3, 2023

Why Is Italy Withdrawing From China’s Belt and Road Initiative?

Italy’s withdrawal from the Belt and Road Initiative would reflect disappointment with the lack of economic benefits and a more fundamental strategic rethinking of China.

Former Italian Prime Minister Giuseppe Conte greets Chinese President Xi Jinping before a meeting in Rome, Italy in March, 2019. Yara Nardi/Reuters
Blog Post by David Sacks
August 3, 2023 10:32 am (EST)

In 2019, during Chinese President Xi Jinping’s visit to Rome, Italy shocked the United States and Europe by becoming the first Group of Seven (G7) country to join China’s Belt and Road Initiative (BRI), the largest ever global infrastructure undertaking. As we detailed in our CFR-sponsored Independent Task Force report on the BRI, under the auspices of this initiative, Chinese banks and companies have financed and built everything from power plants, railways, highways, and ports to telecommunications infrastructure, fiber-optic cables, and smart cities around the world. With its five-year memorandum of understanding up for renewal in March 2024, Italy appears poised to withdraw from the BRI, a reflection of frustrations with the initiative’s unmet promises and the country’s strategic reassessment of China.
It is not difficult to see why the BRI enticed Italy. Having suffered through three recessions within a decade, Italy was looking to attract investment and expand Italian exports’ access into China’s huge market. At the time, many Italians felt abandoned by Europe, while its populist government was skeptical of the European Union (EU) and more than willing to turn to China to fulfill its investment needs. Italy saw an opportunity to leverage its political weight to sign on to the BRI in hopes of beating out others for Chinese attention and investments.
Xi had his own reasons for courting Italy. The country served as a major terminus along the ancient Silk Road, and Italy’s inclusion in the BRI helped Xi link his signature foreign policy initiative to a golden era of Chinese prosperity and influence. There are also enduring connections between the two countries: Italy is home to the largest Chinese population in Europe, while the countries share deep trade linkages in the production of fabrics, leather goods, and more. As China looked to increase its influence in Europe, drive a wedge in the EU, and sow divisions between Washington and Brussels, Italy appeared as a weak point it could press.