Is Italy’s ongoing and forthcoming crisis an opportunity for China?

Is Italy’s ongoing and forthcoming crisis an opportunity for China?


Italy, a pool of strategic assets both in terms of traditional and advanced industries and also in internationally recognised brands and technology, proves to be the ‘Ace’ of cards for China’s geo-economic hold in growth and development. Italy occupies a vital position in the framework of China’s 21st century Maritime Silk Road, with China eyeing to expand its trading routes from the Mediterranean through to northern Europe. Italy became a part of the Belt and Road Initiative (BRI) with the hope of exploring new opportunities in trade and investment. However, the scenario in Italy defines prospects of some other benefits and beneficiaries : the trade deficits of Italy have been significantly dipping since 2010 and had reached $20.9 billion in 2019, with a decline in Italian exports to China; China, Italy’s third largest import partner, contributed more than 7 per cent of imports; and hence, including Italy in the BRI project, symbolises China’s ambitions in Europe and its growing influence in the world.
Year 2020, which was expected to be the year of Euro-Chinese summitry, has turned out to be one in which the entire economic picture of Italy has drastically changed. Of all the nations reeling under the threat of the global pandemic of Coronavirus, Italy, Iran and the United States have come out to be the worst hit countries. The outbreak that has brought everything to a halt has put millions of lives at risk. Even after the world gets a respite from the global pandemic, the situation will not be restored to normal as another economic crisis is waiting to strike. Italy, being adversely affected with more than 20,000 deaths from the deadly virus, also had a hampered economy which is still reeling under its deep recession. And when no one was around, the Chinese propaganda machine did not think twice to quickly seize the opportunity by sending medical supplies to Italy. China stood up to the phrase “a friend in need is the friend indeed”, and in the name of humanitarian aid sent medical equipment to further its ambitions and its influence. However, the delivery failed in its mission as the test kits and masks were defective and failed the standards defined by the U.S. Food and Drug Administration.
China seized the moment. Beginning with the supply of the medical equipment, albeit defective, China then proposed rolling out a new “Health Silk Road” to go along side the existing Belt and Road Initiative. Since there is no fixed time till assigned to this ongoing pandemic and since an economic pandemic is destined to follow, China knows that there will be many countries interested in carrying out their political agendas, and making sure political and economic ties with Italy are established early on will mean that China can benefit from the ongoing crisis.
Unpredictable market shocks, affecting the economic and social fabric of Italy following the nationwide lockdown is awaiting Italian citizens and businesses. Small and medium sized enterprises (SMEs), considered the backbone of the Italian economy are most at risk as Italy comes out of isolation. Worse still, the economic crisis in Italy will create more acquisition opportunities for China, especially including those with decreased value. There is no doubt that China will not leave any stone unturned in getting the best for itself out of the humanitarian and economic crisis. History is likely to repeat itself as Chinese investment in Italy rose from 100 million Euros to 7.6 billion Euros in 2015 merely through the acquisition of Italian firms. This period, following Coronavirus, will be worse than what happened during the Eurozone crisis.
Being the second largest industrial nation in Europe after Germany, Italy is politically and strategically an asset that a cunning player like China will seize the opportunity to grasp by any means. This is evident in China’s plans for Italy. China is interested in Italy’s ports and infrastructure, its quality food, design and tourism potential, its high technology hubs and the development of 5G in the country. The aid provided by China amid the Coronavirus crisis aims to further strengthening the Sino-Italian relations and pave the way for further deepening the grounds of the diplomatic relations between the two countries.
It must be realised that Italy is not the only nation reeling under a humanitarian and economic crisis, as the whole of Europe, if not the world will have to deal with the aftershocks in the nearing months. In the era of cut-throat competition, where no economy would risk its opportunities nor showcase its influence, a growing power like China can harness the situation in Italy to prove its competence whilst at the same time hampering the future of the European Union.

Pc : https://www.flickr.com/photos/ell-r-brown/28165878752

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