Opinion | Italy should not mull exiting BRI, it could inspire other European G7 countries
By Augustus K. Yeung
INTRODUCTION
Italian and international media have reported that the Italian government is mulling exiting the China-proposed Belt and Road Initiative which Italy joined during President Xi Jinping's visit to Italy in March 2019.
Given the role Michele Geraci played in the signing of the memorandum of understanding between Beijing and Rome and her current involvement in this important issue, she thinks that these reports are not based on facts, nor should they reflect the real intention or views of Italian Prime Minister Giorgia Meloni.
"The reality is much simpler: PM Meloni has not yet fully focused on the Belt and Road Initiative, because she has been preoccupied with other more pressing issues related to domestic politics as well as international crises, such as Ukrainian crisis, inflation, energy supply in Italy, the flow of migrants into Italy, a seasonal crisis that Italy faces every summer."
As an indication of that, during her meeting with the United States President Joe Biden a few days ago, she emphasized that she will not accept any interference in Italy's national affairs by the U.S. and that her responsibility as prime minister is to protect and take care of the interests of Italy. Therefore, the Belt and Road Initiative is an issue that will be discussed between Beijing and Rome, not decided by Washington. And the decision will be based on facts."
Data and analyses clearly point to benefits and therefore a renewal of the BRI for an additional five years.
"From 2018 to 2021, Italy's exports to China grew by 20 percent, higher than those of its main competitors France and Germany. Even exceeding the range, from 2018 to 2022, the difficult years for the Chinese economy. Italy's figures show its exports to China grew by 11 percent compared with about 2 percent for both France and Germany. This indicates the catch-up process, which was my goal when I worked to ensure Italy joined the Belt and Road Initiative, is starting to materialize, which is encouraging," said Michele Geraci, former undersecretary of state at the Italian Ministry of Economic Development.
Critics of the MoU argue that, while Italy's exports to China have grown, Chinese exports to Italy have grown at a faster and higher rate, increasing the trade deficit for Italy. Italy's trade deficit has increased but using it as an argument against the renewal of the MoU is fundamentally flawed. No economist looks at trade surplus or deficit as a measure of a country's advantages or disadvantages. Note: In fact, trade surplus was considered a source of wealthy back in the 16th century, during the mercantilist era, before economists developed new theories to prove it wrong around 1800."
BRI is not just a trade deal between Italy and China. It is also a platform to cooperate with the rest of Europe, Asia and Africa.
"Therefore, those who insist that 'trade deficit is bad' are hanging on to a 200-year-old, wrong theory. But in the specific case of Italy's growing import good from China, not only this is not a bad thing; instead, it can be good for our own economy. What Italy buys today from China are not those goods that used to compete with Italian domestic products (textile for instance) which indeed created some problems for the Italian economy 30 years ago.
Today, Italy mostly imports goods that it does not produce, hence they cannot be detrimental to domestic consumption or companies. Italy imports Chinese goods that are components of our production chain, and thus are necessary to support our import-led-growth and import-led-export model. And since these goods are relatively cheap, they contribute to mitigation of inflation. Of the $17 billion increase in Italy's trade deficit, more than 40 percent (US$7 billion) comes from import of mobile phones, electric batteries, laptops and other "cheap" electronic equipment that Italy needs to expedite our digital and green transition in addition to mitigating inflation.
The other urgent problem Meloni needs to solve is inflow of migrants from Africa. The solution is not, like some media outlets argue, proportionately distributing the tens of thousands of migrants that arrive every year in Europe among the European Union member states. The real solution is how to promote stable social and economic development in African countries, whose population will grow from the current 1.5 billion to 4 billion by 2100. The Belt and Road Initiative will prove a golden asset in achieving that goal. (Source: Macau Post Daily)
CONCLUSION
Like a pioneer in the Yukon, the Canadian Northwest territories, panning for gold. I have struck gold. Only that she is more important than gold as – Michelle Geraci, the former undersecretary of state at the Italian Ministry of Economic Development – is a world-class high-official in the administration of PM Meloni.
Her arguments for Italy to remain the only G7 country in China's Belt and Road Initiative is based on social facts, sound theory and solid economic data. And she is not just thinking of Italy, but the thousands of poor African migrants that have made their way to Italy and other parts of Europe now and in the future.
Michelle Geraci is looking like the pragmatic American Janet Yellen and Jacinta Ardern, the former Prime Minister of New Zealand. These gallant three have one striking feature in common: they do not politicize essential issues when it comes to China.
Michele Geraci has pledged to provide the Italian PM with "all the necessary data and analyses on the global economy," she said with determination. "I expect the MoU to be renewed with potential changes in language to put emphasis on stronger cooperation with China on climate action, peace and security, and Africa's development."
As the first and only G7 country to join the BRI, "Italy could inspire other European G7 countries to join the initiative. If anything, the agreement between Italy and China should be further strengthened, not abandoned." Concluded Geraci.
The views do not necessarily reflect those of DotDotNews.
To contact the writer, please direct email: AugustusKYeung@ymail.com
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