China's Belt and Road Initiative 500 days after the 2017 Beijing Summit: developments and prospects

Pubblicazioni Easternational

Rome - 2018, October 1st - An International Conference by Istituto Affari Internazionali (IAI) and Easternational. In attachment: Photo Gallery and Speakers Power Point Presentations.

The conference held on 1st on October aimed at collecting the experiences and points of view of other EU countries on the Belt and Road Initiative, thus abandoning the traditional Italo-centric focus of the numerous conferences held on the topic from 2016 onwards. 'China's Belt and Road Initiative 500 days after the 2017 Beijing Summit: developments and prospects' was therefore the first initiative of its kind in Italy.

Ferdinando Nelli Feroci, President of IAI, and Marco Marazzi, President of Easternational, welcomed the guests, both underlying the importance of a coordinated European approach in dealing with the challenges and the opportunities arising from the BRI, but also considering the uniqueness of the issues that the project presents, which are not an exclusive competence of the EU. Ambassador Nelli Feroci also underlined the importance of the infrastructural aspects of the project for a country like Italy, which is located in the centre of the Mediterranean. Marazzi recalled the creation of the China-EU Co-investment Fund and expressed the hope that this will be the first step towards a wider cooperation between Europe and China (also in Africa).

During the Keynote speech, President Gentiloni recalled the Italian presence at the Beijing Summit in May 2017, as the only G7 country sending a delegation headed by the Prime Minister, and the importance that China accorded to the Italian presence. To face the BRI with a European approach, Gentiloni said, it is fundamental, but on some issues Italy cannot wait for the European Union to move, because it requires long time and coordination between the different countries. Ambassador Li Ruiyu concluded the opening remarks by tracing back the history of the project and its evolution in recent years, explaining that the intention of the Chinese government is to coordinate directives and investments of the project with all the countries involved. Recalling the special relationship between China and Italy, the Ambassador also mentioned a monument that celebrates the most important personalities in the history of China. The only foreigners are two Italians: Matteo Ricci and Marco Polo.

Françoise Nicolas, a researcher at the Institut Français des Relations Internationales and George Papaconstantinou, professor and former Minister of Finance and Environment, Energy and Climate Change in Greece took part in the first panel, with Nicola Casarini as a moderator.

Nicolas explained that the target of the BRI is to increase connectivity, not only with physical infrastructures, but also with an expansion of other sectors within the legal, touristic, security and customs areas. This involves an 'intangible' cooperation on standards and exchange of goods and information, including 'soft' infrastructures such as the digital ones. Over the past five years, the expansion of the BRI has also been geographical, shifting from connecting Asia to Europe with a global impact, from the Arctic to South America.

According to Nicolas, the BRI must be seen as an attempt to align China's internal and international priorities. This involves restructuring the global governance in the new multipolar system in the search for guidance and a new form of globalization. According to the French economist, there is a mutual prudence between China and Europe, and a greater internal debate is needed on the EU side in order to better understand all the dimensions of the BRI and support connectivity projects, without being naive on the ultimate Chinese goals.

Papaconstantinou, whose presentation mainly focused on Greece and the Balkans, agreed with Ms. Nicolas, explaining that the absence of a clear position on the European side is an obstacle to the definition of common rules. In the region there are infrastructural investments, such as in the port of Piraeus, and financial activities, such as loans. Greece and the Balkans have a crucial position in the geography of the BRI, as they connect Europe to the Mediterranean and the Persian Gulf. Chinese projects in the area are preexisting the BRI and are part of the 'Balkan Silk Road', a series of infrastructure projects that allowed Balkanic nations to accumulate capital and get rid of the influence of Ankara and Moscow.

From the Chinese perspective, Greece is seen as a privileged gateway to Europe. The acquisition of Piraeus by COSCO in 2009 with a first share of 50% in exchange for liquidity and investments is not a coincidence. This deal has led to further investments in tourism, energy and other sectors. China has the appetite, the taste for risk and a long-term investment strategy. It has proved to be trustworthy with the Greek authorities and companies, gaining their confidence in the most dramatic moment of the Greek crisis, and has now a privileged position.

In the following panel moderated by Andrea Goldstein, OECD economist and member of the Easternational Scientific Committee, Przemyzlaw Kowalski, President of the Center for Economic and Social Research in Warsaw and Yu Jie, Academic of the London School of Economics and adviser of numerous governments and international organizations on China, gave their speeches. Kowalski's presentation focused mainly on Eastern Europe, which considers itself a bridge between China and the rest of the continent.

Most of the Chinese investments in Poland are private: there are no large public investments under the BRI perspective, which reflects the absence of economic or political bases. Among the economic problems there is the principle of competitive advantage: the government support to Chinese companies create distortions on the international markets and the trade balance of Poland, (but also in the rest of Central and Eastern Europe) is totally biased in favour of Beijing. Among the political problems there is the opposition of the EU, which fears a possible rupture of the European harmony. Furthermore, the US or NATO don't have a favourable view of the BRI, and a potential closeness with China is viewed with suspicion.

Yu Jie reiterated a concept expressed by Françoise Nicolas: the BRI is a combination of China's internal and external policies to launch itself globally. The United Kingdom, apart from Brexit, is a benchmark for China, in the context of Western democracies, considering the trade war with the US and the skepticism of Brussels. Many large British companies already have partnerships with Chinese companies, but they do not want the government to commit to the BRI. In Beijing Theresa May herself said that she will not support the BRI, because she feels uncertain about the benefits for the United Kingdom, contradicting what was anticipated by the Chancellor of the Exchequer, Philip Hammond a few months earlier. The United Kingdom is aiming to provide BRI-related services, which are convenient for China to obtain more Western support. It is time for China to become less 'Sinocentric' and put itself in the shoes of the other nations, in order to convince them to integrate into the BRI.

In the last panel focused on the BRI and Italy the Undersecretary for Economic Development Michele Geraci has illustrated the recent steps of the new Government towards China, culminating in the Memorandum of Understanding. According to Geraci, the Italian approach must be open towards Beijing, while still remaining in the context of NATO and the EU. According to Geraci, in Europe it is now developing a rift between countries in the north (skeptical towards Chinese investments) and those of the south (which need liquidity and for which the geographical proximity to Africa opens up opportunities as a potential hub for Chinese commerce).

Introducing the third and final panel, Goldstein outlined an overview of the trade between the BRI countries and Italy, which exports pharmaceutical, food, energy and car products, with a greater infiltration in Albania, Bahrain, Kazakhstan, and Croatia. The discussion continued with Alessandro Decio, Managing Director of SACE, Davide Cucino, President of the Italian-Chinese Chamber of Commerce and Vincenzo Ercole, head of the Farnesina's International Business Development area.

Decio identified the success of Italian performances abroad in the quality and synergy between the public and private sectors in the export. Italian companies cannot compete directly with Chinese rivals due to their size and because the export support system has no infrastructure to allow it. According to Cucino, one of the ways to increase exports is to work on principles and new common rules under the BRI. Among the obstacles at present there is the absence of a common point of view on the BRI within the European institutions and the fact that most of the work (89%) is carried out by Chinese companies also in third countries. According to Cucino, the 'Made in China 2025' strategy offers a great opportunity for Italian companies, which are strong in all the 10 pillars on which this project is based. Vincenzo Ercole has also found many areas of cooperation with Chinese companies, whose investments in Italy such as Pirelli, Atlantia and the port of Vado Ligure are solid, long-term and bring benefits to the country. Ercole concluded that we need to strengthen our SMEs to allow them to work with multilateral development funds.

The event was a success, with interesting considerations by the speakers and by the audience who asked several questions. A unique conference in Italy that we hope will be followed by others.

Areas of interest

Infrastructures (38)
Trade (40)
Direct Investments (52)
Geopolitical aspects (32)

Geographical areas

Italy (41)
China (70)
Russia (7)
Europe (46)
Asia (33)

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