Between new opportunities and risks: Italy in China after leaving the Silk Road

Italy's stay in the new Silk Road lasted about four years.
In recent hours, in fact, the Italian government has officially informed China of its desire not to renew the Memorandum of Understanding signed in 2019 and relating to Rome's participation in the Belt and Road Initiative (BRI).
Meloni's decision After six months of rumors, indiscretions and more or less plausible hypotheses, Giorgia Meloni led the silent reversal of her executive from a project, the one launched by Chinese president Xi Jinping in 2013, deemed too ambiguous to be kept active .
Ambiguous, meanwhile, from a geopolitical point of view, given that the season of Western opening towards Beijing has come to an abrupt halt following the growing tensions between the USA and China, aggravated by other regional crises (from the war in Ukraine to the Taiwan issue) and thorny commercial issues (the Dragon's dominion over electric cars and some strategic materials).
And ambiguous, too, from an economic point of view.
This, in particular, because, according to the Meloni government, the BRI would not have brought significant benefits to Italy, at least not in the quantity imagined at the time of accession.
Italy-China: Rome's plan after leaving the BRI The 2019 agreement will expire in March 2024, and would have been automatically renewed if Rome had not provided China with a written warning of its intention to abandon the BRI (all with at least three months in advance).
An Italian government source, Reuters reported, reported that Beijing had received a letter "in recent days" to explain to its Chinese counterpart that Italy would not renew the pact.
“We have every intention of maintaining excellent relations with China even if we are no longer part of the Belt and Road Initiative.
Other G7 nations have closer relations with China than we do, despite never having been in the BRI,” a second government source said.
So, without the Silk Road, what channels will Rome intend to use to implement its economic relations with the Asian giant? First of all, Italy will leverage the 2004 Global Strategic Partnership, then signed by Silvio Berlusconi and former Chinese Prime Minister Wen Jiabao.
After that, during 2024 there are at least three opportunities that Rome will be able to exploit to erase the shame of having second thoughts about the BRI and hope to inaugurate a new era in economic-commercial relations with the Dragon.
The first coincides with the Italian presidency of the G7, which could allow the Italian government to use diplomatic leverage to ease global tensions and be appreciated by both the United States and China.
We then mention the visit beyond the Wall (not yet scheduled but certain) of the President of the Italian Republic, Sergio Mattarella, and the celebration, in January, of the 700th anniversary of the death of Marco Polo.
The weight of the economy All this is valid from the Italian point of view.
However, we must take into account the possible Chinese reaction.
Are we really sure that Beijing won't change its attitude towards Italy? It is difficult to imagine a noisy controversy on the part of the Dragon, which would thus highlight the news of the "loss" of the only G7 country to have joined the BRI.
As if that weren't enough, the communist leadership must think about much more urgent internal problems: from the real estate crisis to stormy relations with the United States, which could lead to open war in the South China Sea.
Be careful though, because it is likely that China could somehow replace Italy in some of those sectors that had up until now made the Bel Paese appreciated in the shadow of the Forbidden City.
We are referring to the luxury and high fashion, agri-food and machinery sectors.
Particularly relevant dimensions, judging by the data.
Regarding the first point, according to a report by PricewaterhouseCoopers (PwC) the Chinese luxury market will reach $119 billion in 2025, contributing approximately a quarter of the global luxury market share.
In 2022, Italian exports of textiles, clothing, leather and accessories to the Asian country had reached a value of 3.5 billion euros.
Made in Italy agri-food exports in the first half of 2021, however, had reached the record value of 24.81 billion with an increase of 12% compared to the previous year.
In the first six months of 2023, +3.2% was recorded.
Finally, also in 2021, Italian exports of machinery and equipment were the main item of Italian exports to China, reaching 4.2 billion euros.
Net of the wide margin of growth possible for Italy in each item listed, Beijing could favor Rome's competitors – from France to Spain – all ready to take advantage of the Italian hitch along the Silk Road.
If this were the case, the exit from the BRI would not trigger a diplomatic earthquake, but rather the loss, by Italy itself, of a preferential lane in the world of Chinese business.
A lane thus far never truly exploited properly by Italian executives.
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