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Italy Has Learned a Tough Lesson on China

Old Western alliances are back on the table after a 2019 deal failed.

By , a freelance China researcher, focused on European Union-China relations.
Then-Italian Prime Minister Giuseppe Conte shakes hands with Chinese President Xi Jinping
Then-Italian Prime Minister Giuseppe Conte (left) shakes hands with Chinese President Xi Jinping before their meeting at the Great Hall of the People in Beijing on April 27, 2019. Parker Song - Pool/Getty Images

When Italy signed a memorandum of understanding supporting China’s Belt and Road Initiative in 2019, then-Prime Minister Giuseppe Conte had been governing for less than a year. The governing coalition of the populist Five Star Movement and the right-wing League party could not seem to agree on what the memorandum was meant to codify. Previously, Beijing had not occupied a prominent position in the country’s foreign policy, and discussions around China were limited.

As the protagonists in a dysfunctional coalition jostled, the debate over the memorandum and Italian interests toward China occurred only through their electoral programs. For the Five Star Movement, China represented an opportunity to export products made in Italy, while the League party insisted on the need to safeguard national interests.

Before signing the agreement, warnings came on many fronts. Both American and European leaders cautioned Rome against signing a bilateral deal with Beijing. Conte, on the other hand, was quick to reassure the public that the agreement was purely a commercial one and that it favored Italian national interests.

When Italy signed a memorandum of understanding supporting China’s Belt and Road Initiative in 2019, then-Prime Minister Giuseppe Conte had been governing for less than a year. The governing coalition of the populist Five Star Movement and the right-wing League party could not seem to agree on what the memorandum was meant to codify. Previously, Beijing had not occupied a prominent position in the country’s foreign policy, and discussions around China were limited.

As the protagonists in a dysfunctional coalition jostled, the debate over the memorandum and Italian interests toward China occurred only through their electoral programs. For the Five Star Movement, China represented an opportunity to export products made in Italy, while the League party insisted on the need to safeguard national interests.

Before signing the agreement, warnings came on many fronts. Both American and European leaders cautioned Rome against signing a bilateral deal with Beijing. Conte, on the other hand, was quick to reassure the public that the agreement was purely a commercial one and that it favored Italian national interests.

Two governments and one prime minister later, Italy has learned its lesson.

The first Conte administration dreamed, as many international governments and corporations have, of China’s huge market potential. Political considerations did not get in the way of increasing commercial exchanges with Beijing. Conte’s second cabinet, which governed a coalition of the populist and China-friendly Five Star Movement together with the left-wing and Atlanticist Democratic Party from September 2019 until this January, adopted more conciliatory tones. Highlighting both the United States’ role as Italy’s main strategic partner and China’s growing global footprint, the then-prime minister envisioned a role for Rome and Brussels to act as a potential bridge between Washington and Beijing.

Since current Prime Minister Mario Draghi took office in February, Italy’s official discourse on the U.S.-China rivalry has emphasized a return to international alliances. At the beginning of his mandate, the newly appointed prime minister clarified that his administration is “strongly pro-European and Atlanticist, in line with Italy’s historical anchors” and said he is worried about the increasing number of conflicts involving China. Draghi’s incisive phrasing leaves no space for misunderstanding: China’s political stances represent a concern.

In addition to a change in perception in the highest ranks of the government, a more nuanced discussion on China is also taking place within the Parliament. Beijing’s escalating crackdown in Hong Kong and a renewed global attention toward human rights abuses in Xinjiang have sparked debate in Italy, where members of the lower chamber are asking the government to do more to push back against China.

In July 2020, the Chamber of Deputies unanimously passed a resolution demanding the second Conte government coordinate with other European Union member states on preserving Hong Kong’s fundamental freedoms. Similarly, this May Italian deputies gave unanimous approval to a cross-party resolution that strongly condemned human rights abuses in Xinjiang and insisted on the need for an independent investigation in China’s northwest autonomous region. On the EU: All Italian members of the European Parliament voted in favor of the body’s resolution, following China’s sanctions against European parliamentarians and researchers, that officially froze discussion on the EU-China Comprehensive Agreement on Investment.

Make no mistake: The new mood has not been embraced by every Italian political figure at all times. From Foreign Minister Luigi Di Maio parroting China’s noninterference mantra on Hong Kong in 2019 to Beppe Grillo, the comedian-turned-political campaigner and leader of the Five Star Movement, echoing Beijing’s propaganda on his blog, the populist Five Star Movement has not entirely dismissed its China-friendly positions. Most recently, Grillo together with Vito Petrocelli, a Five Star senator and the chair of the Senate’s Foreign Affairs Committee, endorsed a  report on Xinjiang that equates well-documented allegations of human rights abuses with “highly politicized anti-China campaigns … most often reporting baseless, unverifiable, or false information.”

Yet the League party, in yet another political U-turn justified with the need to stay relevant in the domestic political landscape, has been very vocal on the second Conte administration’s performance on China. In a spectacular volte-face that followed League leader Matteo Salvini’s failed attempt at precipitating elections in 2019, Salvini went from endorsing the Belt and Road memorandum with Beijing to declaring that he would suspend relations with China if he were prime minister.

Italy is also emphasizing economic security and prioritizing industrial strategy, including protecting national champions in key sectors. In just four months, the Draghi administration has used the government’s power a number of times to limit Beijing’s presence in Italy’s 5G infrastructure and to block the takeover of a semiconductor company. In addition, the suspension of talks over the potential sale of Italian truck-maker Iveco to China’s FAW Group benefited from coordination with France.

Italy’s reemphasis on its traditional alliances comes with the realization that the extravagant commercial promises made around 2019 have not been met. As highlighted in a report by the Torino World Affairs Institute published in late 2020, “the [economic] calculations [that justified the signature of the Belt and Road memorandum] were optimistic at best, if not entirely fallacious.” Ironically, in 2020, other European countries that have not signed up for the Belt and Road Initiative such as France and Germany did equal or better trade with Beijing than Rome did. Prospective collaborations between China and Italy in a number of sectors enshrined in the memorandum did not materialize.

The botched handling of the Belt and Road memorandum has come with severe political costs. As a member of the G-7, a founding member of both the EU and NATO, and the third-largest economy of the eurozone, Italy endorsing the Belt and Road Initiative gave Chinese President Xi Jinping’s pet project a significant boost at home and abroad. On the other hand, joining the Belt and Road meant that Rome became viewed as “the European weak link in the power struggle with China,” Politico reported, and not only for the United States. While Italy was signing the memorandum, France’s President Emmanuel Macron highlighted the need for a “geopolitical and strategic relationship” with China. Insisting on ending the “European naivety” toward Beijing, Macron warned against “discuss[ing] bilaterally agreements on the new Silk Road.” Similar concerns have also been raised by Berlin through less public channels.

In addition to reputational damage, the participation in the Belt and Road Initiative cost Italy a seat at the negotiating table. When the EU and China rushed to finish off the last details of the Comprehensive Agreement on Investment in December 2020, Macron and German Chancellor Angela Merkel joined European Commission President Ursula von der Leyen together with European Council President Charles Michel in a videoconference with Xi. Although it was argued that Merkel’s and Macron’s attendance was justified by their roles in the rotating EU presidency, the presence of the French president irked Italy’s Conte, himself absent from the talk. Then-Undersecretary of State for Foreign Affairs Ivan Scalfarotto from the Italia Viva party linked such unusual arrangements with Italy’s signature of the memorandum of understanding. In his view, signing the memorandum cost Rome its reputation as a trustworthy negotiating partner.

Rome’s new China policy under the Draghi administration thus seeks a return to its “historical anchors” and is showing a clearer vision on Italy’s international posture. A stronger alignment with the European and trans-Atlantic stance is exemplified by the endorsement of a green alternative to the Belt and Road, announced at the G-7 meeting this month. While each member has different views on the geographical scope of the project, they “broadly agree on the need for a more transparent alternative to the Chinese program.”

Answering a question on whether the memorandum of understanding signature had been brought up during the summit, Draghi in his press briefing said that the memorandum will be assessed carefully. While such a statement does not necessarily imply a revision of the agreement or a formal exit from the Belt and Road Initiative per se, it signals once more a different approach from that of the Five Star Movement politicians. As strong proponents of Italy’s participation in the Belt and Road Initiative, both Conte and Di Maio have defended Rome’s ambiguous China policy on several occasions.

But with the advent of Draghi as prime minister, even most of the Five Star Movement has changed positions. While Draghi was taking part in the G-7 summit, Five Star’s founder Grillo was meeting the Chinese ambassador in Rome, Li Junhua. Conte was also set to join the meeting—but he deserted at the last minute, on the advice of the now-Atlanticist Di Maio.

Italy’s political flirtation with China may have turned out to be only a brief interlude. Draghi’s declaration at the G-7 highlights that Rome intends to pursue a frank China policy, to cooperate where possible while bearing in mind that Beijing does not play by multilateral rules and does not share a democratic vision of global governance.

This new realpolitik aligns Italy with the tripartite definition of the 2019 EU-China Strategic Outlook, which depicts Beijing simultaneously as a negotiation partner, economic competitor, and systemic rival. It comes at a time of fervent debate in Brussels over not only the EU’s relationship with China but also its regional interests in the Indo-Pacific and its ties with like-minded partners, including Taiwan, India, and Japan. Italy should seize the opportunity that Draghi represents to signal it is a reliable partner and willing to engage in shaping a cohesive China policy in international forums.

Ludovica Meacci is a freelance China researcher, focused on European Union-China relations. She holds a Master of Science from SOAS University of London and was a 2017 Yenching scholar at Peking University.

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