Xi Jinping's dream to connect the entire world economy with Chinese-built infrastructure is poised to claim its biggest victory yet

xi jinpingChinese President Xi JinpingGetty Images

  • Italy is set to sign a memorandum of understanding with China to take part in its giant Belt and Road Initiative (BRI) trade project, the Financial Times reported.
  • The BRI aims to link China with dozens of countries around the world with mostly Chinese infrastructure.
  • Italy, the 8th-biggest economy in the world, would be the largest so far to join the BRI.
  • The White House National Security Council said it was "skeptical" of the investment and warned that the BRI is "made by China, for China's initiative."

Italy is reportedly preparing to join China's Belt and Road Initiative (BRI), the massive trade project aiming to connect the country to dozens of nations across Asia, Africa, Europe, and the Americas through Chinese-built infrastructure.

Its participation in the project would be a victory for China. Italy, the world's eighth-largest economy by GDP, would be the largest nation to join up so far.

Italian officials plan to sign a memorandum of understanding (MOU) to support an infrastructure program with Beijing when Chinese President Xi Jinping visits Rome on March 22, the Financial Times reported Wednesday,

It cited Michele Geraci, an undersecretary in Italy's economic development ministry, who said: "We want to make sure that 'Made in Italy' products can have more success in terms of export volume to China, which is the fastest-growing market in the world."

He added that the negotiation of the MOU "is not over yet, but it is possible that it will be concluded in time for [Xi's] visit."

china italyA vendor holds up a Chinese paper umbrella on a hot summer day in front of Rome's ancient Colosseum July 28, 2013. Reuters

The exact details of the MOU are not clear. BRI contracts between China and partner nations are typically shrouded in secrecy.

The Medi Telegraph, a website dedicated to Mediterranean shipping news, reported on Tuesday that Italian authorities in the port of Genoa are preparing to set up a new company with the state-owned China Communications Construction Company to operate "major works related to the port of Genoa."

It's not clear whether the MOU would cover the port of Genoa project.

The BRI, which went into effect in 2013, is divided between six land routes, collectively named the Silk Road Economic Belt, and one maritime route, the Maritime Silk Road. Along those roads are railroads, gas pipelines, shipping lanes, and other infrastructure projects.

China is estimated to have invested between $1 trillion and $8 trillion into the project. It is one of Xi's personal priorities, and was written into the country's constitution in 2017.

one belt one road land sea routesMap showing the projects subsumed under One Belt, One Road program by China. (March 2017)Reuters

Many major economies, including the US and India, have been reluctant to join the BRI amid growing concern over China's military and political ambitions with their trade projects and tech exchanges, and its global trade war with the US.

Currently at the center of global suspicions over China is telcom giant Huawei's plan to install 5G networks around the world. Earlier this year the US Department of Justice charged Huawei with fraud and IP theft, and called the company a threat to national security.

Read more: Here's why the US is terrified of one Chinese company controlling the world's 5G networks

China has also been accused of offering loans at high interest to economies which struggle to pay them back. A notable case is Sri Lanka, which in 2017 handed over an entire port in its south to China because it couldn't afford to pay back loans.

Last year Malaysia axed $22 billion worth of infrastructure projects with China last year, citing an inability to pay back their loans given its mounting national debt.

china belt and roadThe China-Kazakhstan logistics terminal was built in 2014 to boost the construction of the Belt and Road.VCG/VCG/Getty Images

'Made by China, for China's initiative'

The White House National Security Council warned against Italy's joining the BRI.

Garrett Marquis, a spokesman for the council, told the FT: "We view BRI as a 'made by China, for China's initiative.'"

"We are skeptical that the Italian government's endorsement will bring any sustained economic benefits to the Italian people, and it may end up harming Italy's global reputation in the long run," he added.

The EU appears split over its attitude to China's economic influence. France and Germany have also been mulling policies to limit China's economic influence, like imposing more stringent screening measures on foreign investment.

Meanwhile, countries like Greece and Portugal have welcomed Chinese investment. The Port of Piraeus, Greece's largest seaport, is majority-owned by the state-owned China Ocean Shipping Company, also known as COSCO.

Some experts believe that China is cracking down extra hard on its frontier regions, notably Xinjiang, to protect its BRI projects located around them.

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