This year’s aborted Italian company was one with less than 50 employees, showing how far one of China’s greatest diplomatic successes in Europe has come.
In 2019, Rome stunned its US-European allies when the government of Italy, then a populist coalition, became the first member of the G7 to sign the China Zone Road Initiative. Signed during Chinese President Xi Jinping’s state visit, the agreement brought Italy to the forefront of Beijing’s battle for global influence.
But then, two years later, the newly appointed Prime Minister of Italy, Mario Draghi, signed a tacit decree that symbolically ended China’s Italian favor էր containing Beijing Beach in Western Europe.
The recent Italian government has already begun to curb Chinese investment amid significant pressure from the United States. Even so, Draghi’s move marked a decisive Italian transition to foreign policy, which he described as “highly pro-European-Atlantic, in line with Italy’s historical anchors.”
It also predicted a wider review of China’s relations with the EU, which recently led to the European Parliament. freezing its expected trade deal With Beijing.
“In order for Italy to seem to align itself with the United States, sometimes small things need to be done to prove it,” said Mikel Gerachi, a Chinese expert who was one of the architects of the Italian Zone Road as Deputy Minister of Economic Development. agreement with Beijing.
“It was a political statement to show that we are concerned about the predatory achievements, that we are in tune with our American friends,” Gerach added. Italy’s participation in China’s BRI remains technically valid, but it has become essentially meaningless that no major deal has been struck.
The Sino-Italian turmoil began in December, two months before Draghi was appointed prime minister. Shenzhen Investment Holdings, partly a state-owned Chinese company, has agreed to buy a 70 percent stake in LPE, a privately held semiconductor equipment company based in Milan.
But in March, when the Dragi government was now in power, the decision to authorize the seizure usually landed on the table of Italy’s new Minister for Economic Development, ian ancarlo iorgetti.
The veteran of the right-wing party, the legislator, offered to apply the laws of the so-called “Golden Power” of Italy to block foreign domination. Draghi signed a decree blocking the sale of LPE He noted the lack of semiconductors, which makes the LPE a “strategic sector”.
LPE, which produces components for energy electronics applications that are also used “inside [the] military field “, as described in the decree, refused to comment. Said Shenzhen Invenland Holdings it will continue to work with LPE in certain areas.
Draghi’s decision was a watershed for Italy, as Italian diplomats say, perhaps for the EU.
Only a few years ago, Italian politicians were excited about how Chinese money would help a struggling economy. According to the Rhodium Group, Italy was the third largest recipient of Chinese investments from 2000 to 2019, receiving a total of € 15.9 billion against the UK’s € 50 billion, € 22.7 billion in Germany և € 14.4 billion in France :
As of 2020, more than 400 Chinese groups also owned shares in 760 Italian companies in “highly profitable or strategic areas,” according to Copasir, the Italian parliamentary committee on national security.
But today, in part because the epidemic has left many Italian companies vulnerable, the Draghi government is less lenient with strategic foreign investment than previous administrations, and has not restrained its golden rule to reduce it.
Last month, Italy, backed by 205 billion euros in EU recovery funds, partnered with France at a low selling price. Italian truck Iveco to China FAW Group. This week, though, Rome conditionally agreed to a contract to supply 5G infrastructure Vodafone Italy և Chinese Huawei:, it came with strict security conditions.
“The move to China is a thing of the past,” said Egoardo Rix, a member of the League of Nations. “Today, that political current is almost non-existent.”
Not everyone thinks that a colder relationship with Beijing is in the best interests of Italy or Europe.
Speaking this week, the former prime minister Romano Prodi said“Until a few months ago. The situation [between China and the EU] It was calmer, but now the agreement is frozen. ” Prodi added that given the strained relations, “both sides need to change their attitude. “It is now formally impossible to do anything.”
Geraci also fears that China’s move by the Draghi government will have economic consequences for Beijing’s Italian companies.
“Officially, the market for Italian goods in China is 13 billion euros a year, but in reality it is three times bigger when you count the goods produced in Italy, which then goes to China through third countries. It’s a very strong market for us. “
How the relationship can be recalculated remains an open question.
Lea Quartapel, a member of the Italian parliamentary committee of the center-left Democratic Party, said the previous turning point in China was a deviation from Italy’s foreign policy, which opened a “geostrategic rift” in the heart of Europe.
But now “Dragi’s caliber not only allows us to strengthen Western values, but also to become a driver of recovery in the post-epidemic period,” he added.
Moreover, as a result of this year’s German-French election this year, Draghi is a key European player whose sustained Atlanticism could influence the EU’s wider policy toward China.
“Italy’s role in keeping the wheel straight will soon become even stronger,” said Emma Bonino, a former Italian foreign minister.
“Of course, dealing with Chinese policy remains difficult. “We can not pretend that the country does not exist,” he added. “We can do business with China as we do with the rest of the world, but we need to be clear about the differences between us and them.”
Additional report by Qianer Liu in Shenzhen