Written by Jason Horowitz
For decades, Italy felt the brunt of the Chinese economic juggernaut that the United States argues poses a threat to the financial and political future of the West.
China’s government-backed manufacturers, operating on a much larger scale with much cheaper costs, devoured small Italian companies producing machinery, textiles and pharmaceuticals. Chinese knockoffs infuriated its high-fashion brands.
But this month, as the United States continued to engage in a trade standoff with China, and leaders of the European Union banded together to demand an end to unfair Chinese business practices, Italy took another route: China’s new Silk Road.
In a move that signaled geopolitical shifts from West to East, Italy broke with its European and U.S. allies during last week’s visit by President Xi Jinping of China, and became the first member of the Group of 7 major economies to officially sign up to China’s vast new One Belt One Road global infrastructure project.
“This is not being isolated from Europe, this is Italy leading,” said Michele Geraci, Italy’s undersecretary for economic development, and the driving force behind the deal, in a telephone interview from China’s southern Hainan province.
“And when you lead,” he added, “you do need to be alone for a split second. But this bit is going to be very short.”
Italy’s transactional tradition in trade and foreign policy, its anti-establishment government’s antagonism toward the European Union, the failure of the United States to intervene effectively and China’s expertise in exploiting political dysfunction — all of those things contributed to the making of the deal.
So, too, did Italy’s desperation for investment, access to China’s enormous markets and anything resembling an economic uptick.
But Italy’s keen sense of history and awareness to the shifts of great powers also may have had something to do with it.
While the United States has been a close ally since World War II and is home to an enormous Italian diaspora, Italy is no stranger to China.
Ancient Romans prized Chinese silk, and the Chinese valued Roman glass. Marco Polo captivated the West with his turn-of-the-14th-century tales of trading with the wealthy East, and the Italian Jesuit Matteo Ricci produced a map of the world in Chinese characters that revealed European exploration to East Asia.
Now as the United States has withdrawn from the world, China is front and center on Italy’s map again.
This week, Prime Minister Giuseppe Conte of Italy said that as China exerts a stronger influence on the world’s economy, it is going to exert “an increasing influence also at the political level.”
Conte was speaking at an event in Rome held by a Jesuit magazine to discuss the Vatican’s own breakthrough deal in 2018 with China, in which Pope Francis made concessions to the Chinese government to bring all the Chinese bishops into communion with Rome, and to gain more access to the world’s most populous country.
In front of an audience of top diplomats, prelates and government officials, all eager to learn more about China, Conte spoke admiringly of China’s efforts to become a world leader in “technology and in innovation, leadership that we know is very contested by the United States.”
The United States, in fact, sought to stop Italy’s joining of the Silk Road.
This week, Secretary of State Mike Pompeo said he was “saddened” by the development.
On Thursday, Deputy Prime Minister Luigi Di Maio of Italy, who also is the political leader of the Five Star Movement, met with National Security Adviser John Bolton at the White House.
Di Maio said that he assured the Americans that the China deal was purely about commerce and that Italy remained firmly in the political orbit of the United States, which has vastly more money invested in the country than China does.
In the months before the deal, Di Maio repeatedly visited China, and nearly made a deal in November, Italian officials said. All along, the Italians said, they heard barely a peep from top officials in the United States, and by the time Bolton’s spokesman went public against the deal earlier this month, it was too late.
A senior government official, speaking on background to discuss internal deliberations, said Washington would have engaged sooner if it had understood that Italy planned to officially join the new Silk Road, which it sees as a strategic threat.
The official said the chaotic nature of Italian politics and the fact that visits to Beijing had become the norm for European leaders made it harder to discern what the Italians were up to.
Indeed, already 16 central and eastern European countries, including 11 members of the European Union, have formal business relations with China.
The Chinese have essentially bought the port of Piraeus, outside Athens, Greece. The new deal will now also allow it access to critical Italian ports, like Genoa and another in Trieste, which has a rail link reaching right into the heart of central Europe.
This month, Mayor Roberto Dipiazza of Trieste looked out his window at a cruise ship that was to set sail for China, following the route of Marco Polo. He said that despite U.S. criticism, “if the Chinese come it is a great opportunity for development, for work, not only for my city, but for my country, for an important part of Europe.”
Not everyone agrees.
As Xi arrived in Italy, Macron of France made a show of strength against China’s aggressive business practices by presenting a united European front against China. He then invited Chancellor Angela Merkel of Germany and European Commission President Jean-Claude Juncker to join him for his meeting in Paris with Xi.
But it was hardly a rude welcome. Merkel, China’s largest trading partner in Europe, seemed open to the prospect of Europe participating more with China, if they evened the playing field.
“We, as Europeans, want to play an active part,” in the new Silk Road project she said after the talks.
France, which is trying to increase its market share in China, announced that it was selling 300 new airplanes to the Chinese and cut billions more euros in other deals, ranging from the export of French chickens to agreements between French and Chinese companies on power grids and ship building.
More than a brush back to the Chinese, the meeting with Xi — who said “a united and prosperous Europe corresponds to our vision of a multipolar world” — seemed to be a turn away from the United States.
“The order of things has been shaken,” the French president said, suggesting the Trump administration’s withdrawal from multilateral agreements had pushed France and China closer together.
The U.S. officials said there was a large difference between bilateral trade deals with China, which every country, including the United States, had a right to pursue, and signing up to the Silk Road, which gave China a propaganda boost that it used to seek more economic gains through unfair business practices.
Geraci didn’t see the difference. He said France was “doing the exact same things that we are doing,” and noted that France and Germany did vastly more business with China than Italy did.
“Once the first domino topples,” he said of Italy’s decision, “the others will follow.”
Already, China has made incursions that have caused deep anxiety in Washington, especially when it comes to use of 5G wireless networks developed by the Chinese electronics giant Huawei.
Washington has warned that the networks could be used by Beijing to spy on communications networks. This week, Britain released a report critical of the security vulnerabilities presented by Huawei. But other European countries are less worried.
When Richard Grenell, the U.S. ambassador to Germany, threatened that the United States would scale back its intelligence sharing with Berlin if Huawei played a role in its 5G infrastructure, Merkel shot him down. “We are defining our standards for ourselves,” she said.
Geraci noted that next year would mark the moment when Asia overtook the rest of the globe as the world’s biggest economy.
It would also, he said, be the 50th anniversary of Italy’s establishing diplomatic relations with China, a move the United States was also highly critical of at the time.
China was rising, Geraci said. “We cannot stop it.”