China keen to work with Italy on trade despite Belt and Road misgivings

China remains willing to work with Italy to improve trade and investment ties, the commerce ministry said on Thursday, even as the only Group of Seven power to join the Belt and Road Initiative (BRI) considers quitting the Beijing-led scheme.

China remains willing to work with Italy to improve trade and investment ties, the commerce ministry said on Thursday, even as the only Group of Seven power to join the Belt and Road Initiative (BRI) considers quitting the Beijing-led scheme. Italy, which presides the G7 bloc of wealthy nations in 2024, considers it has not reaped sufficient benefit from the deal and has until December to formally withdraw or its membership will roll over for another five years.

The hugely ambitious project sees China strengthening trade ties with large infrastructure spending in countries along the historic Silk Road route via Asia to Europe and beyond. "China is willing to work with Italy to continue to deepen mutually beneficial cooperation, explore opportunities for potential trade and investment... and promote further development of the China-Italy comprehensive strategic partnership," said He Yadong, a commerce ministry spokesperson.

The two countries signed a memorandum of understanding to advance BRI construction during a visit by Chinese President Xi Jinping to Rome in 2019, but trade flows have not improved as Italy had hoped. According to business daily Il Sole 24 Ore, Italy is looking for a "soft exit" by agreeing with China to drop the requirement that Rome formally notifies Beijing it wants out.

Italian Foreign Minister Antonio Tajani, who met Chinese counterpart Wang Yi in Beijing this week, told Italy's parliament on Wednesday that a strategic partnership would be more valuable than a deal such as the BRI. Redefining the relationship would placate Italy's G7 partners while maintaining good business links with Beijing.

SENSITIVE DIPLOMACY Italy's trade deficit with China grew by 22.3 billion euros ($23.9 billion) between 2019 and 2022, according to the Italian Ministry of Foreign Affairs.

Speaking on Italian public broadcaster RAI on Thursday morning, Tajani said "We will consider whether or not to stick with this memorandum... a decision will be made." "But this should not affect relations with China."

China invested in 24 projects in Italy between 2014 and 2020, according to data compiled by the American Enterprise Institute think tank, worth $22.27 billion in total, ranging from shares in football clubs AC Milan and Inter Milan to telecoms companies and the postal service. Any loss of the erstwhile terminus of the old Silk Road would be diplomatically embarrassing for China, which has expected to mark the achievements of the Belt and Road initiative at an international forum in Beijing in October.

So far, 90 countries have confirmed attendance, China's foreign ministry announced on Thursday. ($1 = 0.9333 euros)

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