Recently, China and Italy formally signed an intergovernmental memorandum of understanding on jointly promoting the construction of the "Belt and Road" in Rome, which has attracted widespread international attention.

　　

"We are the first G7 economies to sign the 'Belt and Road Initiative' memorandum of understanding, and hope to take the lead and become a template for other EU countries," Italian Vice Minister of Economic Development Mikele Geraci wrote in a signed article in the Financial Times, "Italy will gain a place on the New Silk Road."

 

What is the significance of joining "the belt and road initiative?

 

The Group of Seven economies (G7) used to be a club of rich countries with global influence, including the United States, Canada, Germany, France, Italy, the United Kingdom and Japan, and an important symbol of Western countries. As one of the G7 member states, Italy's accession to the "Belt and Road" this time also means that the "Western rich countries" formally recognize the initiative.

 

In response, Italian Deputy Prime Minister Di Mayo said, "I firmly believe that Italy, as the first G7 country to participate in the 'Belt and Road', will certainly walk a broad road. Under the common witness of the leaders of the two countries, the strategic development cooperation between China and Italy will reach a new peak."

 

On March 27, following the signing of the "Belt and Road" memorandum by Italy, another EU country Luxembourg announced that it would join the "Belt and Road" circle of friends. According to data released by China's Belt and Road Network, China has signed 172 cooperation documents with 124 countries and 29 international organizations to jointly build the "Belt and Road.

 

Although many countries and international organizations have adopted an attitude of active cooperation with China, they regard the "Belt and Road" as a new round of economic globalization initiated and promoted by China when the "anti-globalization" is surging against the current and the world is facing new challenges. However, a small number of Western countries led by the United States have always been sensitive and even opposed, and the United States has reacted particularly strongly. "We doubt whether the Italian government can bring any sustained economic benefits to the Italian people, and in the long run, this may eventually hurt Italy's global reputation," said Marquis, a spokesman for the US National Security Council."

 

Passionately or thoughtfully?

 

As an important European country, Italy did not consider joining the "the belt and road initiative" initiative on a whim. On March 8, Italian Prime Minister Conte responded to the US threat. He said at a foreign policy seminar held in Genoa: "Joining the Belt and Road Initiative will bring new opportunities to Italy. This does not mean that we will be forced to do something, but let us participate in this project."

 

After the impact of the 2008 financial crisis, Italy's economy remained in the doldrums and once became the hardest hit by the European debt crisis. In 2018, Italy ushered in its third recession in a decade, and the economic weakness has become more serious. According to the European Commission's forecast, Italy's economic growth in 2019 will be much lower than the euro area average (1.3 per cent) and will have the lowest growth rate in the EU.

 

To make matters worse, Italy's unemployment rate remains high, at 11.2 per cent in 2018, well above the OECD average of 5.8 per cent. As a result, private consumption slowed, dampening household disposable income growth and offsetting the positive effects of expansionary fiscal policy. Add in the fact that Italian banks' balance sheets are vulnerable to rising sovereign bond yields, and the government budget deficit will reach 2.5 per cent in 2019, making it the fourth largest debtor in the world, more than € 2.3 trillion. When the EU has not introduced effective solutions and the Italian economy is weak, it can only seek to strengthen cooperation with China, which has huge development potential.

 

In fact, as early as May 2017, the then Italian Prime Minister Gentiloni publicly stated that the "Belt and Road" initiative has brought new opportunities for Italy's economic development and also provided important opportunities for China and Italy to cooperate on a larger scale.

 

In June 2018, the Italian government realized the rotation of political parties, and the government led by the current Prime Minister Conte came to power. Although the new government and the previous government have very different political colors and opinions, they are dealing with the development of Sino-Italian bilateral economic and trade relations and the "Belt and Road" initiative. In terms of, it has a high degree of policy coherence. This fully shows that Italy's active response to the "Belt and Road" initiative is a deliberate decision based on its own interests.

 

New Opportunities on "the belt and road initiative"

 

In history, Italy is the end of the ancient Silk Road. The Italian traveler Mark Polo first built a bridge between Eastern and Western civilizations. According to data from the Ministry of Commerce, China is currently Italy's largest trading partner in Asia. In 2018, the bilateral trade volume between the two countries exceeded 50 billion U.S. dollars, a year-on-year increase of 9.1 percent.

 

In Italy, there are about 300 textile machinery and accessories companies, mainly in the vicinity of Biella, Brescia and Bégamo. Italian companies produce different types of textile machinery, including spinning machines, twisting machines, looms, knitting machines, hosiery knitting machines, printing and dyeing machines, printing machines, etc., thus the textile machinery industry has become one of the driving forces of Italian manufacturing.

 

According to the Research Center of the Federation of Italian Garment Industry, in 2018, affected by the decline in Italian textile production and the decline in imported textiles, the total business volume of Italian textiles was 7.86 billion euros, imports decreased by 5.9 per cent compared with the same period last year, exports increased slightly by 0.3 per cent compared with the same period last year, and the trade surplus was 2.45 billion euros, an increase of 5.5 per cent over the same period last year. The largest export market for Italian textiles is still China. The export volume of Italian textiles in mainland China and Hong Kong, China increased by 3% and 6.1 respectively. Exports are a key driver of the Italian textile industry at a time when the total value of textiles made in Italy has declined slightly.

 

Ercole Boto (Ercole Botto Poala), president of the Milan Textile Fair in Italy, was optimistic about the figures, saying that Italian textile exports to EU countries fell by 3.4 per cent, but exports to countries outside the EU increased by 2.9 per cent, driving the growth of exports to China to a certain extent. "this confirms the long-term vitality of the Chinese market." Chinese enterprises and consumers increasingly favor high quality fabrics made in Italy, which also stimulates the Italian fabric enterprises to expand the speed and strength of the Chinese market.

 

Raffaella Carabelli, chairman of the Italian Textile Machinery Association, also said: "Now China's textile industry is undergoing transformation, and some customers with clear development plans will not only focus on price. Many Chinese customers have realized that investing in green technology can achieve better production processes and create better products, and the value is incalculable. At present, Italian machinery manufacturers pay more attention to the sustainability and environmental protection of machines, which can help Chinese customers to carry out more efficient and green production, which is in line with the ecological green action in the industrial field being promoted by the Chinese government."

 

"Although not as large as China, but in Europe, Italy is still a textile power. The same development process is also being reproduced in China. Although China is still famous for large-scale manufacturing, it will definitely move to the upper reaches of the market in the future. The production process of the textile industry will be more complex, the variety of products will be more abundant, the quality will go up, and the quantity will come down. China's textile industry will also increase the flexibility of equipment, which is the advantage of Italian textile machinery." Raffaella Carabelli added.

 

With the signing of a memorandum of understanding on the construction of the "Belt and Road" between China and Italy, the two countries will usher in an important historical opportunity for cooperation and development: Italy, as an important country on the European continent and a bridge connecting North Africa and the Middle East, its unique geographical location will help Carry out cooperation in the field of infrastructure and logistics. In addition, with its advantages in traditional manufacturing and technological innovation, Italy will also become China's priority partner in related fields.