When US President Joe Biden and Italian Prime Minister Giorgia Meloni meet today at the White House, the central topic of conversation will not be Ukraine, Russia, or the movement towards populism in Europe, which the head of the Transalpine government symbolizes.
The subject was China, despite the fact that neither Biden nor Meloni mentioned that country in their very brief meeting with the press at the White House. The United States wants Italy to get out of China’s controversial Belt and Road Initiative (BRI), which seeks to build massive infrastructure from the Asian country to Europe, crossing all of Eurasia. And Meloni herself is considering doing so. And for a wide range of reasons. One is that the economic profitability of the project – described by many as ‘the New Silk Road’ – is more than questionable. In fact, it was another right-wing populist, Giuseppe Conte, who got Italy into the BRI in 2019.
The infrastructure projects of this new ‘Silk Road’ have been on numerous occasions of a quality much lower than expected and have been carried out taking more into account the geopolitical and economic interests of China than those of the countries in which they are located. they were carried out. Highways with no exits, ports too large for the demand of ship traffic, or roads to nowhere have been some of the failed projects of the ‘Belt and Road’ in countries as heterogeneous as Montenegro, Sri Lanka or Kenya.
Added to this, obviously, is the strategic component. The project is aimed at achieving China’s entry – and sometimes control – of a series of critical infrastructures, such as ports, airports, electrical networks, and land communication routes, in addition to the technological systems associated with them. With the proliferation of 5G and the Internet of Things, for a foreign country to have the ability to control a country’s electrical distribution system is a very significant potential risk. But control is not purely technological.
In principle, the insurance sector does not seem to have much to do with infrastructure. But, as a recent study by the Washington think tank The Dialogue has shown, the expansion of the Belt and Road has been accompanied by, for example, Chinese insurers that not only protect Chinese companies from financial risk. that carry out the infrastructure works, but also cover the insurance of the ships, trucks and trains that use these infrastructures.
Meloni would have no problem leaving the BRI, since Conte only signed an Understanding Agreement (Memorandum of Understanding, or MoU), which will be automatically renewed next March. But, if one of the parties decides not to do so, the document ceases to be valid without major consequences. In fact, the prime minister already announced her intention in May. But there is a political factor: China could retaliate – subtle but effective – with Chinese companies operating in that country. By pure chance, the English-language Chinese Communist Party newspaper Global Times recalled that “for example, between 2019 and 2021, Italian exports to China increased by 42%”, in an editorial significantly titled Italy’s decision regarding the BRI must be done without US influence.
But, beyond the Italian case, the New Silk Road is getting bogged down in the economic and political realities of the world. It’s not just that many of your projects don’t have the expected utility. It is that in other cases they have led to the ruin of the countries that have accepted them. To expand its second largest port, Hambantota, which was part of Sri Lanka’s New Silk Road, it took on such a large debt from China that it ended up in default, and had to hand over that same port to Beijing for 99 years.
A series of African and Asian countries – from Zambia to Laos – have fallen into suspension of payments, despite which China refuses to carry out debt relief, although it has at least agreed to extend the repayment terms of credits that today those nations cannot pay. The New Silk Road is, therefore, a chain -of silk, yes- around the neck of some of the countries that have entered it.
According to the criteria of The Trust Project