China scores first ‘Silk Road’ beachhead in the Mediterranan as Xi tours Europe

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By John J. Metzler

UNITED NATIONS — Beijing’s ambitious “Belt and Road” infrastructural initiative has scored its first significant beachhead in the Mediterranean, as Italy has signed on to the expansive Chinese globe-spanning project.

China’s President Xi Jinping was feted in Rome with a grandiosity fit for an visiting Emperor as the Italian government signed ten business deals worth $23 billion.

“Xi in Rome; The Escort fit for Kings,” headlined the newspaper Corriere della Sera.

Xi Jinping and Prime Minister Giuseppe Conte in Rome on March 23. / Alessia Pierdomenico / Bloomberg

Italy is the first of the industrial G-7 countries to formally join China’s Belt and Road plan. Yet amid commercial euphoria in Italy there’s a growing unease in the European Union and the USA over China’s investment inroads, and especially its beachhead in two key ports.

The populist Italian government signed a non-binding Memorandum of Understanding involving a wide range of expanded links with China involving the energy giant ENI, as well as engineering firms and banks. Importantly an agreement between the China Communications Construction Company and the Ports of Trieste and Genova will allow Beijing easier transportation access to both southern and Central Europe. A few years ago, the Chinese bought a 51 percent interest in the Greek port of Piraeus.

The port of Trieste is particularly significant. Situated on the nexus of the Adriatic Sea, the old Austro-Hungarian port was a maritime lifeline for landlocked Central European and Balkan states. Though in need of infrastructural upgrades, Trieste has historically been a “free port.”

China’s Belt and Road, also known as the Silk Road, has emerged as a massive Debt trap for many countries along its global route. Italy’s Deputy Premier Matteo Salvini, interestingly has warned about potential security threats from China.

As the Eurozone’s third largest economy, Italy seeks to boost trade and investment ties with China.

But beyond the obvious, the “Belt and Road” deal allows Beijing to gain an extraordinary level of legitimacy with a key European Union member. Jean-François Dufour, who heads the Paris-based DCA China-Analysis consultants, told France 24, “It’s a strong diplomatic gesture that is, above all, symbolic.”

“It is true that, politically, Italy could become a Trojan horse for China, because Chinese investment will push Rome to try to temper other European powers’ intransigence toward Beijing,” Dufour added.

A spokesman for the U.S. National Security Council said that the Italian government had no need to “lend legitimacy to China’s infrastructure vanity project.” Such a stinging rebuke for a close ally is rare.

“China is a partner, but it is at the same time a competitor,” Sebastian Kurz, Austria’s chancellor concedes.

But let’s not just blame the Italians for the bonhommerie with Beijing. It would be unpardonably arrogant not to mention that Germany and France have long had deeper business and trade ties with the People’s Republic of China. Just last year in Hamburg, I was amazed how this huge German port serves as a conduit for Chinese trade and commerce in northern Europe.

After Italy, Xi Jinping’s road show went to Monaco and France to commemorate diplomatic ties opened between Paris and Beijing 55 years ago, and to build upon decades of established commercial links. A series of Sino/French deals on nuclear power, aerospace and tele-communications totaling $40 billion were signed. Purchases of 290 Airbus 320 aircraft are being finalized.

Despite Huawei’s controversial technology being banned by the U.S., Canada and in many European countries, France has not yet decided on the matter.

Though the French favor widening trade with Beijing, at the same time the Macron government and civil society are decidedly nervous about the wider geopolitical implications of a militarily strong China, which has emerged as the EU’s largest trading partner.

“Europe has woken up about China,” Macron said, “Since the beginning of my mandate, I’ve called for a defense of European sovereignty.”

Speaking at the State banquet with Xi in Paris, Macron called for a “strong Europe-China partnership”, based on “fair and balanced” trade. Recently the EU described China as “a systemic rival.”

Clearly the Europeans are trying to maintain a delicate balance between presumably profiting from closer Chinese commercial ties and the very real threat of widening trade deficits, technology theft and political rifts with Washington over the Trump Administration’s tough China trade policy and robust stance barring Huawei 5G telecom technology.

China has been playing the Europe card as a hedge against a more aggressive American trade and security policy. Indeed, until recently Europe too was willing to play the China card to counter the U.S.; now Europeans are having nervous second thoughts.

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues. He is the author of Divided Dynamism the Diplomacy of Separated Nations: Germany, Korea, China (2014). [See pre-2011 Archives]