In March, Italy signed a memorandum of understanding on the China-proposed Belt and Road Initiative (BRI), becoming the first G7 country to join the scheme. How will Italy’s participation facilitate further China-EU cooperation? How can Italy dispel concerns from its US and EU allies? Global Times (GT) reporter Wang Wenwen talked to Nicola Casarini (Casarini), a senior fellow and head of Asia Research of Rome-based Istituto Affari Internazionali, over these issues.
GT: As Italy joins the BRI, there must be something in it for Italy. What benefit could Italy gain and what does Italy want to achieve?
Casarini: Italy wants, in my opinion, three things from China. The first one is to increase market access for companies, in particular for made-in-Italy products. The expanding middle class in China is very much interested in buying and consuming certain kinds of products, in particular, luxury products. And Italy is a very important producer of these products.
The second point is to have more Chinese investments under the BRI framework. It means a lot of infrastructure, but also other kind of investments.
And the third, which is linked up to what Italy wants to achieve, is also some form of commitment that China may be willing to intervene in financial markets if Italy faces some turbulence in placing its debt. Now Italy is going through an economic situation which is not easy. And there could be some problems in financial markets for Italian bonds. Italy would like to diversify its reliance on partners and allies and have also China as a potential partner that could help Italy economically and financially, if it is needed. Of course, this could also be in the interest of China, both economically and politically.
GT: Both the US and the EU are rattled by Italy's decision. What are their concerns?
Casarini: First of all, the US is in a global battle for supremacy with China, which has to do not only with trade, but also technology. It means that the US looks at China as a competitor challenging the dominant position of the US in the international system. Besides that, the US and the EU share the same concerns. This has something to do with the way the BRI is developed.
GT: How will Italy override such concerns?
Casarini: Italy will override it by saying that the MOU recently signed with China could also serve as a model for other advanced nations. Because the language contained in the MOU is in line with Western norms and principles, and consistent with the EU strategy for Eurasian connectivity. That's why the Italian government believes that this could be a model for other G7 nations and other big EU countries.
The EU is concerned not about the content of the MOU. This is a kind of MOU that I could call the second-generation MOU for advanced nations, like Italy. The problem for the EU is the way the Italian government has approached the issue. Italy did not inform and consult with the EU before the negotiation process, which means it decided to adopt a bilateral approach and break ranks with the rest of the bloc.
GT: What experience could China draw from Italy's signing?
Casarini: What convinced Italy to join was that after many negotiations, the Chinese government accepted to sign an MOU in which principles and norms are in line with Western standards.
I think the Chinese government is changing now. They have understood the need to calibrate and change certain things. That's why Italy and China signed a very advanced MOU. China can also learn to think different ways and adjust the thing in order to take into consideration the needs of the other side.
GT: What is the prospect of China-Italy cooperation under the framework of the BRI?
Casarini: Democracies, particularly Italian democracy, are used to having lots of governmental changes, which means I doubt this government will remain in power in six months. This Italian government was the perfect government for the signature but not the implementation. For the implementation of the MOU, you need a different government.
Because the most important party in the coalition is against big infrastructure projects. It is called the Five Star Movement. They have more than one third of the votes in the parliament, but they are against those infrastructure projects that would link, for instance, the port of Trieste to the rest of Europe. They are against high-speed railway connections. There could be soon a different government in Italy, led by a center-right coalition.
But in any case, the next government will have a different approach toward China. They may probably be less China-friendly but more useful for implementation of the MOU. In other words, the next Italian government, if a center-right one, will treat China the way EU does. But it will implement infrastructure projects needed for the implementation of the MOU.
GT: According to the recent document of the EU Commission "EU-China: A strategic outlook," it defines China as a "negotiating partner." What does this notion convey in terms of the EU's attitude toward China?
Casarini: It means that bilateral relations depend on the issue. And there will be cases where if the EU and China cannot find a compromise, there will not be any more continuation of the negotiations. I think it is a change of position from the European perspective.
But this does not mean China's importance in the EU has declined. On the contrary, China is even more important for the EU. IEUIt's the approach which has changed. I think Europe has become a bit more like Trump in its approach to China, a bit more tough.
GT: The EU Commission published its Strategy on Connecting Europe and Euro-Asia, which is believed to be the European version of and a challenge to the BRI. Is there any potential for the two to cooperate?
Casarini: Yes. First of all, it is, in my opinion, the response to the BRI, not the challenge, because challenge is that you try to stop anywhere you see. In this case, the Eurasia Connectivity Strategy welcomes all kinds of strategies for connectivity, as long as they are in line with internationally accepted standards and norms such as transparency rules, a level-playing field, reciprocity, labor and environmental standards. As long as the connectivity strategy of a country is in line with that, the EU is happy to collaborate and to join the forces. There are already plans both in Brussels and in Beijing to find some cooperation projects.
This could be in the long-term interest of China. When China created the Asian Infrastructure Investment Bank (AIIB) and at a certain point decided about the governing principles, it adopted a Western-style model. Because of that, you had countries like the UK, Germany, France, Italy joining as founding members of the AIIB, and the AIIB has become an example of China being able to create something new, alternative, for instance, to the World Bank, but at the same time, able to operate and work with internationally accepted standards and norms. And so far, it's a kind of success story.
China is at a stage where it believes that there is a need to create alternative institutions and initiatives. But when these initiatives meet with existing norms and principles created by the West, they benefit China. And this will be the example that China can give also to the world: to create something new, but without throwing away what works.