Italy joins China’s Belt and Road project

published 28 March 2019

940_MW_P10_P&E_Bottom — A fantastic deal for President Xi

Italy has become the first G7 nation to endorse the Belt and Road Initiative, China's controversial series of global infrastructure investments, says Miles Johnson in the Financial Times. The two countries signed a non-binding declaration that endorsed the deal as well as "a number of agreements between companies in sectors including energy and steel" worth more than "several billion euros".Italy's endorsement has "caused consternation" in Washington and Brussels, "which have voiced concern about China using the initiative to gain influence or control over strategically important assets".

Italy is clearly hoping to get a share of the billions of dollars that have already been invested by Beijing across more than 60 countries, in disparate infrastructure projects including railways, roads and ports, says The Economist. Indeed, some experts believe the total amount spent in Beijing's attempt to create a "modern day Silk Road" will "run to $1trn or even more". But critics say that the deal is "unlikely to guarantee Italian firms access toprojects or specific investments" and parts of Italy's government worry about damaging relationships with the EU and US.

The move is indeed likely to exacerbate tensions between Italy and its European neighbours, says Holly Ellyatt for CNBC. Italy's anti-establishment coalition has already clashed with Brussels over immigration and its spending plans. Its deal with China is likely to be another source of conflict. But for China's president, Xi Jinping, the deal is "fantastic", says Rory Green of TS Lombard. "It's a really big coup for Xi and it will give him a foothold in the heart of Europe."

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri

Italy joins China’s Belt and Road project

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