China's Belt and Road Initiative goes to Italy

FT World Weekly
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Automatic TRANSCRIPT

We're discussing China's belt and road initiative. Joining me in the studio is Kristin Shepard soon to join the staff of the tea in Beijing and on the line from Rome is our correspondent miles Johnson. And the point of including somebody in Rome will become apparent in a moment but Christian first Belton road initiative briefly. What is it known tiv- is seizing pains grand vision for a new form of trade and infrastructure networks across Eurasia that will tie China to surrounding countries through road through railway through dry ports through special economic zones. And then boast the trade relationship, but also increase China's geopolitical clout within the region, it's a very big project has nominated. We're talking up to a trillion dollars. We over the course of many years. So some of the estimates suggest that we'll get up to around. Trillion dollars around twenty twenty five current figures thought to be around two hundred billion. Yes, it certainly is a very big sweeping vision. Much of this was happening before there was already interest for Chinese companies to go out and to invest overseas. But then there was this new branding, and this new push to really strengthen these particular routes throughout southeast Asian central Asia. And why do you think she has made it his signature initiative? What's the underlying motivation is to do with the phase that China's economy has reached or is to do with the phase, it's geopolitical ambitions of regional some combination. It's a combination and the economic impetus is logically do with excessive capacity within China. China's economy is slowing and for many years, it's been building bridges high rises all these construction companies. Well, they need something to do. They need somewhere to go. And it makes sense for them to build these new trade routes for. China. But then there is also a much broader vision, which is about a rising China one that is strong in its region. This is a move away from some of these predescessors who are more into the idea of hiding and biding. But instead there is this desire to really step up into nationally to rework, some of the international order, the trade order and also international institutions and one way to do that is through this platform of the Belton road and miles. I mean when the Belton road, I started emerging those concentration on China's near if you like on central Asia Kazakhstan on so on. But it's now clear that the belt will the road reach all the way into western Europe that she shouldn't pingers indeed appearing in Italy tomorrow. We're talking on Wednesday. He'll be there tomorrow Thursday. And Italy, I gather is points to become the first major EU country to sign up to Belton road. Is that what's? To happen. Do you think? Yes. That is what is expected. It's expected to become the first G seven country to officially endorse the bell Thom road, and it's sort of an interesting development from an entirely in perspective of European perspective. And a NATO perspective in the sense that Italy has long voiced desire like most developed countries to work closely with China to sort of re economic benefits from collaboration with China Chinese investment, but as always sort of toed the line and not breaking away from it sort of allies and getting too close to China. What we've seen is lease car Carin populist coalition government, which has markedly different approaches to international organizations and its predescessors because if we just said, we're going to break away and cozy up to China, and that is something which is long and some of Italy's traditional allies in a way. It's not that surprising that this populist nationalist government should be willing to stick a finger in the eye of Brussels. Even that's a member of the EU. But this. Is also something that Washington has lobbied against an people. Like, my Taylor Savini. The deputy prime minister, I've been very very close to the Trump administration. Does that surprise you? That is where it gets complicated. Because matters Vini is very expert is sort of hoovering up a lot of the sort of international attention, and so almost being portrayed, although he's only a deputy, prime minister minister of the interior almost being portrayed as sort of almost prime minister, effective, prime minister. But this China episode is revealed as a sort of multiple law nature of the Italian government in the sense of Salvini as you say has halted Trump has been close to Trump visors or former Trump advisory Steve Bannon, and has very much cultivated this sort of of the sort of international populist and someone who builds relationships along those lines, but he's actually being sidelined in this process. He has come out and said, you know, it's okay, if the Chinese invest in all ports, but we don't want them investing in telecoms or any sensitive areas. And he tried to back a bit. Whereas the momentum of all the parts of the Italian government and the Italian state operates overruled him. This is really a process being driven by Matt Torella, the president who is the person who's going to be meeting g and Mattis avenue coalition partner. Louis the Meyer, head of the five star movement who said this is a fantastic opportunity to sell quote, unquote, made in Italy to China, and so this is actually something which is weaken Salvini and Just just. give us a sense of what the optimist in Italy hoped to see from this Chinese deal. I mean, are they thinking you mentioned selling stuff to China, but they're also hopes for infrastructure development? They've talked about the development of the port of Trieste, for example. Exactly the optimist on this is the Italy has several strategically important ports. They are currently stuffed of investment and sort of underperforming underinvested, and they could do with some inbound capital and then subsequently use by large Chinese companies. But then there's also this other element to this. Where Italy to a certain extent has for a while, and especially much more under this government, g to their problems with Brussels over the budget. And you know, Italy is the second most indebted country and the your zone off degreasers, the percentage of GDP, and it needs people to buy its debt and opening up a toss for Chinese capital to flow into it today and also to potentially buys government bonds is something which is strategically advantageous for the government by versa. Fis it's sort of funding sources away from what they see as Brussels, which is the sort of referee in this game done which has been hostile toward the Italian government's trying to do. But of course, I guess potentially get themselves hooked on a rather dependent relationship with China. Chinese essentially, what's keeping the Italian state financially afloat. That is the fear. I mean, all policy Italian government will the sort of figures in this from Kante, the prime minister to Salvini, everyone is busy being cleared to caveat all of their comments about Chinese investment by saying we have to protect our strategically employed in interest the architect of the Italian government's China policy who is a technocratic political figure who's physically apart the league, but it's gonna be categorized. She he's always said that he wants greenfield investment from China. He wants Chinese capital to come in and build things in

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