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    Italy's Belt and Road Deal Sparks EU Concerns Over Future Relationship

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    Prominent Italian and EU officials are sounding the alarm over Rome's endorsement of the China-led Belt and Road Initiative, saying Beijing could be seeking to expand its political influence in Europe rather than boost its trading relations with the EU.

    Kristian Rouz — The cabinet of Italian Prime Minister Guiseppe Conte endorses China's Belt and Road investment and trade initiative, making Italy the first G7 nation to sign up to the scheme. The announcement has sparked worries among EU officials, who say the agreement between Rome and Beijing could result in conflicts of interest in China-EU trade.

    In a signing ceremony Saturday, Italian Deputy Prime Minister Luigi Di Maio said Rome would uphold its commitments within the EU and the bloc's trading relations with other Western partners, including the US. However, Italian officials said the Belt and Road could serve as a way to help the struggling Italian economy — despite concern that the deal between Italy and China could produce additional trade tensions.

    "This is a very important day for us, a day when Made-in-Italy has won, Italy has won and Italian companies have won," Di Maio said.

    The agreement has reportedly raised questions in Washington, as it comes amid heightened tensions between China and what the US sees as Beijing's malicious trade practices and forced technology acquisition. Some experts expressed concern China could gain access to breakthrough EU technology through its pact with Italy, while promising billions of investment into the ailing Italian economy.

    During Chinese President Xi Jinping's visit, Italian companies signed $2.8 bln worth of deals with their Chinese counterparts, saying a total value of future deals could reach up to 20 bln euros.

    However, the EU appears to be sceptical as its main exporter, Germany, is facing the prospect of stringent US tariffs on cars. In this light, Brussels would rather not irritate Washington — as the US sees Belt and Road as advancing what it calls China's predatory lending and debt diplomacy across the globe.

    The deal between Italy and China comes after EU officials said at a summit this past Friday that China is a 'systemic rival', adding that Brussels should develop a strategy to contain the spread of China's economic and political influence, including in Europe.

    However, Xi dismissed such concerns, saying the expansion of Belt and Road into Italy simply represents 'business as usual', and does not have any political strings attached.

    READ MORE: Italy Officially Becomes First G7 Country to Join China's Belt and Road Project

    "Between us, there is no fundamental conflict of interest," Xi said. "China wants commercial exchanges to go both ways and for investment to flow in both directions."

    China is facing an economic slowdown and a possible decrease in its trade surplus with the US, regardless of the outcome of the ongoing trade talks between Beijing and Washington. Additionally, America's crackdown on China's tech giant Huawei is set to limit Beijing's access to Western technology.

    In this light, Italy's accession to Belt and Road represents an important economic opportunity for China. However, political and diplomatic concerns still linger.

    "Don't tell me China is a free market," Matteo Salvini, leader of Italy's right-wing populist League party said Saturday. Salvini stressed that any future deepening of trade and investment ties with China must take place 'on equal terms'.

    He stressed Italy must not become 'anybody's colony' and said China could be seeking to obtain sensitive 5G technology through Italy. Salvini also did not attend the state dinner for China — pointing to a likely political conflict within Italy in the wake of the deal's signing.

    Xi is set to visit France in the coming days, where he might face a cold welcome. French President Emmanuel Macron said the 'time of European naivete' with respect to China is over, and urged a unanimous stance among EU member states on Beijing's efforts to expand its influence.

    However, Xi stressed he's only building bridges between China and the EU, downplaying the concerns of European leaders.

    READ MORE: Italy Tries to Catch Up With EU Partners by Joining Belt and Road — Analysts

    "China appreciates Italy's willingness to play a positive role in developing a healthy and stable China-Europe relationship, and its devotion in pushing forward the connectivity of Asia and Europe," Xi said.

    The full scope of anticipated trade and investment deals between Italy and China has yet to be announced. It also remains unclear how Italy's partnership with Italy's Belt and Road will work and whether Rome will be applying for Chinese loans — as Italy's debt-to-GDP ratio already stands at an alarming 132 percent.

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    Tags:
    Belt and Road Initiative, European Union, Luigi Di Maio, Xi Jinping, Italy, China
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