[Italy’s transactional tradition in trade and foreign policy, its anti-establishment government’s antagonism toward the European Union, the failure of the United States to intervene effectively and China’s expertise in exploiting political dysfunction — all of those things contributed to the making of the deal.]
By Jason Horowitz
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President
Xi Jinping of China with Prime Minister Giuseppe Conte of Italy in Rome
last
week. Credit Yara Nardi/Reuters
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ROME
— For decades, Italy felt
the brunt of the Chinese economic juggernaut that the United States argues
poses a threat to the financial and political future of the West.
China’s government-backed manufacturers,
operating on a much larger scale with much cheaper costs, devoured small
Italian companies producing machinery, textiles and pharmaceuticals. Chinese
knockoffs infuriated its high-fashion brands.
But this month, as the United States
continued to engage in a trade standoff with China, and leaders of the European
Union banded together to demand an end to unfair Chinese business practices,
Italy took another route — China’s new Silk Road.
In a move that signaled geopolitical shifts
from West to East, Italy broke with its European and American allies during
last week’s visit by President Xi Jinping of China, and became the first member
of the Group of 7 major economies to officially sign up to China’s vast new One Belt One Road global
infrastructure project.
“This is not being isolated from Europe, this
is Italy leading,” Michele Geraci, Italy’s under secretary for economic
development, and the driving force behind the deal, said in a telephone
interview from China’s southern Hainan province.
“And when you lead,” he added, “you do need
to be alone for a split second. But this bit is going to be very short.”
Italy’s transactional tradition in trade and
foreign policy, its anti-establishment government’s antagonism toward the
European Union, the failure of the United States to intervene effectively and
China’s expertise in exploiting political dysfunction — all of those things
contributed to the making of the deal.
So, too, did Italy’s desperation for
investment, access to China’s enormous markets and anything resembling an
economic uptick.
But Italy’s keen sense of history and
awareness to the shifts of great powers also may have had something to do with
it.
While the United States has been a close ally
since World War II and is home to an enormous Italian diaspora, Italy is no
stranger to China.
Ancient Romans prized Chinese silk and the
Chinese valued Roman glass. Marco Polo captivated the West with his
turn-of-the-14th-century tales of trading with the wealthy East, and the
Italian Jesuit Matteo Ricci produced a map of the world in Chinese characters
that revealed European exploration to East Asia.
Now as the United States has withdrawn from
the world, China is front and center on Italy’s map again.
This week, Prime Minister Giuseppe Conte of
Italy said that as China exerts a stronger influence on the world’s economy, it
is going to exert “an increasing influence also at the political level.”
Mr. Conte was speaking at an event in Rome
held by a Jesuit magazine to discuss the Vatican’s own breakthrough deal last
year with China, in which Pope Francis made concessions to the Chinese
government in order to bring all the Chinese bishops into communion with Rome,
and to gain more access to the world’s most populous country.
In front of an audience of top diplomats,
prelates and government officials, all eager to learn more about China, Mr.
Conte spoke admiringly of China’s efforts to become a world leader in
“technology and in innovation, leadership that we know is very contested by the
United States.”
The United States, in fact, sought to stop
Italy’s joining of the Silk Road.
This week Secretary of State Mike Pompeo said
he was “saddened” by the development. On Thursday, Luigi Di Maio, Italy’s
deputy prime minister and the political leader of the Five Star Movement, met
with National Security Adviser John R. Bolton at the White House.
Mr. Di Maio told reporters that he assured
the Americans that the China deal was purely about commerce and that Italy
remained firmly in the political orbit of the United States, which has vastly
more money invested in the country than China does.
In the months before the deal, Mr. Di Maio
repeatedly visited China, and nearly made a deal in November, Italian officials
said. All along, the Italians said, they heard barely a peep from top officials
in the United States, and by the time Mr. Bolton’s spokesman went public
against the deal earlier this month, it was too late.
A senior government official, speaking on
background to discuss internal deliberations, said Washington would have
engaged sooner if it had understood that Italy planned to officially join the
new Silk Road, which it sees as a strategic threat.
The official said the chaotic nature of
Italian politics and the fact that visits to Beijing had become the norm for
European leaders made it harder to discern what the Italians were up to.
Indeed, already 16 central and eastern European
countries, including 11 members of the European Union, have formal business
relations with China.
The Chinese have essentially bought the port
of Piraeus, outside Athens. The new deal will now also allow it access to
critical Italian ports, like Genoa and another in Trieste, which has a rail
link reaching right into the heart of Central Europe.
This month, Mayor Roberto Dipiazza of Trieste
looked out his window at a cruise ship that was to set sail for China,
following the route of Marco Polo. He said that despite the American criticism,
“if the Chinese come it is a great opportunity for development, for work, not
only for my city, but for my country, for an important part of Europe.”
Not everyone agrees.
As Mr. Xi arrived in Italy, Mr. Macron of
France made a show of strength against China’s aggressive business practices by
presenting a united European front against China. He then invited Chancellor
Angela Merkel of Germany and European Commission President Jean-Claude Juncker
to join him for his meeting in Paris with Mr. Xi.
But it was hardly a rude welcome. Ms. Merkel,
China’s largest trading partner in Europe, seemed open to the prospect of
Europe participating more with China, if they evened the playing field.
“We, as Europeans, want to play an active
part,” in the new Silk Road project she said after the talks.
France, which is trying to increase its
market share in China, announced that it was selling 300 new airplanes to the
Chinese and cut billions more euros in other deals, ranging from the export of
French chickens to agreements between French and Chinese companies on power
grids and ship building.
More than a brush back to the Chinese, the
meeting with Mr. Xi — who said “a united and prosperous Europe corresponds to
our vision of a multipolar world” — seemed to be a turn away from the United
States.
“The order of things has been shaken,” the
French president said, suggesting the Trump administration’s withdrawal from
multilateral agreements had pushed France and China closer together.
The American officials said there was a large
difference between bilateral trade deals with China, which every country,
including the United States, had a right to pursue, and signing up to the Silk
Road, which gave China a propaganda boost that it used to seek more economic
gains through unfair business practices.
Mr. Geraci didn’t see the difference. He said
France was “doing the exact same things that we are doing,” and noted that
France and Germany did vastly more business with China than Italy did.
“Once the first domino topples,” he said of
Italy’s decision, “the others will follow.”
Already, China has made incursions that have
caused deep anxiety in Washington, especially when it comes to use of 5G
wireless networks developed by the Chinese electronics giant Huawei.
Washington has warned that the networks could
be used by Beijing to spy on communications networks. This week, Britain
released a report critical of the security vulnerabilities presented by Huawei.
But other European countries are less worried.
When Richard Grenell, the American ambassador
to Germany, threatened that the United States would scale back its intelligence
sharing with Berlin if Huawei played a role in its 5G infrastructure, Ms.
Merkel shot him down. “We are defining our standards for ourselves,” she said.
Mr. Geraci noted that next year would mark
the moment when Asia overtook the rest of the globe as the world’s biggest
economy.
It would also, he said, be the 50th
anniversary of Italy’s establishing diplomatic relations with China, a move the
United States was also highly critical of at the time.
China was rising, Mr. Geraci said. “We cannot
stop it.”
