In March 2019, when China’s President Xi Jinping visited Italy, the Italian government signed a Memorandum of Understanding with China regarding its Belt and Road Initiative (BRI). Although the agreement has faced strong criticism from both the United States and the European Union as Italy became the only G7 country to join the BRI, that event brought a major diplomatic boost for the Beijing´s effort to revitalize the concept of the ancient silk road and put Italy in a unique position to connect the East and the West. Four years later, Italy suggests it will quit Chinese initiative. The agreement will terminate in March 2024 and it requires a written notice of withdrawal three months in advance.
Together with specific political conditions and geopolitical needs, economic rationale in particular was a significant Italian objective in signing this MoU. Italy’s experience shows that being a member of the BRI does not necessarily guarantee more trade and investment with China.. According to Italy´s Trade Agency, between 2019 and 2022, Chinese exports to Italy increased by 51%, while imports from Italy to China rose by 26%. Traditional trade deficit with China thus remains. In terms of Chinese investment in Europe, that has remained highly concentrated in all non-BRI countries, such as Germany, France and the Benelux.
Although the Italy´s decision is still uncertain, the intense discussion is sparking. Considering the current global scenario, particularly situation in Ukraine, the European Union´s gas dependence as well as the United States interests, withdrawal seems like the more realistic and probable decision. Italy has been recently redefining its foreign policy objectives, and its decision is motivated by geopolitical rather than economic factors. The Italy´s potential withdrawal, coming in the year of marking the 10th anniversary of the BRI this autumn, would unavoidably affect China’s aspirations to be a global leader and shape the changing geopolitical reality.