China hails ‘historic’ Europe trip as Xi signs billion-dollar deals with France, BRI with Italy

TUESDAY 26 MARCH 2019

Chinese President Xi Jinping is wrapping up his overseas jaunt of the year, visiting Europe on a mission to strengthen Beijing’s ties to the region.

Key points:

  • Italy is the first G7 country to sign up to the Belt and Road Initiative
  • France signed a bilateral deal with China, but questioned China’s BRI
  • Belt and Road initiative aims to connect Asia to Europe by building a new ‘silk road’

The trip was described as being of “historic significance” to China, according to state media, with the country’s powerful leader visiting Italy, France and Monaco and signing a series of multi-billion-dollar deals over the past few days.

But one aspect of Mr Xi’s trip has Western observers and European allies particularly concerned — Italy’s decision to sign up to Beijing’s controversial Belt and Road Initiative (BRI), as well as more than two dozen other trade and infrastructure agreements.

In doing so, Italy has become the first Group of Seven nation — which includes powerful economies like the UK, the USA, Japan, Germany, France, Italy, and Canada — to join the initiative, which was previously rejected by most Western countries, including Australia.

The BRI under Mr Xi has been described by analysts as one of the largest and most ambitious foreign policy and economic plans in modern history, as it aims to re-establish a “silk road” connecting China’s underdeveloped regions to Europe via Asia.

Overnight, Mr Xi also signed a multi-billion-dollar deal with French President Emmanuel Macron, however the French leader did not agree to sign onto the BRI.

‘Debt-ridden, cash-strapped’: What did Italy sign and why?

Over the weekend, Italian Prime Minister Giuseppe Conte became the first G7 leader to back and sign a Memorandum of Understanding (MOU) endorsing China’s landmark multi-billion-dollar BRI plans.

Mr Conte resisted pressure from members of his own government, his allies in Europe and the United States to sign 31 agreements worth up to 20 billion Euros ($31.8 billion), according to Reuters.

While proponents of the initiative maintain that it is a positive step to open trade with the economic superpower, there still appears to be fears around the initiative itself and what it means for Western sovereignty and global security.

This would offer China strategic access into landlocked Mediterranean countries including Austria, Hungary and the Czech Republic, however no details have been released on how the ports will be managed.

Euan Graham, executive director at La Trobe Asia, said Italy’s decision underlines the country’s preoccupation with its current economic situation.

“On one level it underlines Italy’s status as the sick man, or soft underbelly of Europe — debt-ridden, cash-strapped and poorly led,” he said.

“It’s not hard to fathom Italy’s motives, since much of the country is literally crumbling at the seams.”

The Italy-China MOU also covered wide-ranging topics including satellites, cooperation in banking, agriculture, natural gas, steel and an increase in bilateral trade.

Mr Conte told the Italian Parliament that the deal should not be a concern for the countries international allies.

“We want to first and foremost rebalance our trade, which is not favourable to us now,” he said, adding that the agreement was not legally binding.

Despite Canberra opting to not sign up to the initiative, the state of Victoria went out on a limb and signed a similar MOU late last year.

‘Strategic error’ or ‘long-term partners’: Did Macron pivot?

Overnight, Mr Xi and Mr Macron signed 15 business deals worth $63.6 billion, including contracts for renewable energy, shipping and banking, as well as an order of 300 Airbus airplanes.

This is despite the French leader telling an EU summit in Brussels last Friday that allowing Chinese companies to purchase European infrastructure was a “strategic error”.

🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴@PopescuCo

Macron: “In a world with giants like China, Russia or our partners in the United States, we can only survive if we are united as the EU.”

🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴@PopescuCo

Despite not joining yet China’s “New Silk Road”, Macron announced that France and China will cooperate on a number of investment projects in some of the countries providing stepping stones on this New Silk Road.

See 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴‘s other Tweets

Today, Mr Macron tweeted that France and China were not rivals, but “long-term partners” at a time where the EU is at a crossroads.

“With China, we are not strategic rivals in Africa — but we can be long-term partners in terms of security, education, infrastructure and development,” he wrote.

However, Mr Macron did not sign on to the BRI, saying it had not met international norms, adding that any cooperation on a “silk road” would need to work in both directions.

Both leaders did not take questions following the deal, but released a joint message saying: “Europe must be united and have a coherent message”.

‘China’s predatory approach’: What have detractors said?

Italy’s signing of the accord sparked concerns about China’s global economic push and increasing influence in the region.

In a tweet, the US National Security Council described Italy’s decision to endorse the BRI as lending “legitimacy to China’s predatory approach”.

NSC

@WHNSC

Italy is a major global economy and a great investment destination. Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people.

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German Foreign Minister Heiko Maas also warned other European countries against following suit with Rome, saying: “In a world with giants like China, Russia or our partners in the United States, we can only survive if we are united as the EU”.

“If some countries believe that they can do clever business with the Chinese, then they will be surprised when they wake up and find themselves dependent,” he added.

Germany’s EU commissioner, Gunther Oettiger, even recommended a veto over future Chinese deals in Europe, following Italy’s announcement on the weekend.

He told Germany’s Funke Media Group that the expansion of transport links between Europe and Asia was positive, but expressed concern that “rail lines or harbours are no longer in European but in Chinese hands,” according to Deutsche Welle.

‘It can be a win-win’: So what will happen next?

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VIDEO: China attempts global dominance with One Belt One Road project (ABC News)

Today is Mr Xi’s last day in Europe. The Chinese leader and Mr Macron are set to be joined by German Chancellor Angela Merkel and EU Commission chief Jean-Claude Juncker later today to hold further talks ahead of an EU-China Summit in Brussels on April 9.

Melissa Conley Tyler, presidential associate from the Australian Institute of International Affairs, told the ABC that despite Canberra’s resistance to join the initiative, it was only a matter of time until more European countries join the BRI due to its “enormous economic benefits”.

“There are arguments that being inside, and holding the initiative accountable, is also the way to go for countries who want to achieve those results, but don’t want to be in a debt trap,” she said.

“Being a part of an initiative can help you to shape them … so it can be win-win.”

Ms Tyler believed more EU countries will join, however we would also see a number of others withdraw, adding that it was a question for the individual countries and whether they thought the deal was worth it.

However, Dr Graham from La Trobe said the EU seemed “hopelessly splintered on China”.

“The divisions [within the EU] are already too wide and China’s influence among smaller ‘spoiler’ member-states is entrenched,” he told the ABC.

“Europe has sadly woken up too late to realise the scale of China’s challenge to European unity, and its complacent governance structures have been unable to react.”

ABC/wires

Topics: business-economics-and-financeinternational-aid-and-tradetradeforeign-affairsgovernment-and-politicsterritorial-disputes,world-politicsitalychinaasia

 

 

SOURCE:  https://www.abc.net.au/news/2019-03-26/italy-joins-china-belt-and-road-initiative-as-france-signs-deals/10935476

 

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