By Dr Khushnam P N
Italy represents geo-economic interests of China, and a crucial geographical position in its 21st century geopolitical framework based on ‘Maritime Silk Route’, an integral part of its grand global geo-economic strategy, the Belt and Road Initiative (BRI).
The BRI aims to bring Chinese products, investments and influence of power to the West, and to implement them the key strategic objectives are the ports and their convenient support management.
A cursory look at Italy in the map of Europe makes its strategic value obvious. The Italian ports of Trieste in the Adriatic Sea and Genoa in the Ligurian Sea appear to be two doors in the eastern and western side of Italy respectively to get access and expand trading routes to rest of Europe.
There are numerous and diverse responses to the growing Chinese presence in Mediterranean and its subsequent implications in terms of economic, political and social consequences. Italy, joining the BRI last year in March, 2019 assumes significance with the fact that it is the first G-7 country and the first founding member of the European Union.
The reactions were sharp as the French President, Emmanuel Macron referred Chinese companies buying such infrastructure as ports as a “strategic error”, US had warned against joining the BRI, they call it a Chinese “vanity project” and accepting it will legitimise the Chinese predatory investment policy while the European Union called China a “systemic rival” and “systemic competitor”.
The serious scepticism and concerns were raised by then European Union President, Jean-Claude Juncker who referred China as a rival and competitor and warned the EU leaders that “We can’t construct something on the basis of persistent imbalances.” The sceptics in Italy have called such deal as playing of chess between a chess world champion and a amateur who play for fun and therefore the consequences are expectedly fixed.
The rising China, however, became successful to push through these warnings, scepticism and criticism in striking a deal and Italy joined the BRI in March, 2020. The Italian decision to defy all these concerns of European Union and the US can be analysed and understood in the light of the absence of security relations and commitments to the mutual challenges of all EU members. Absence of a coordinated approach based on reconciled strategies of all members to face emerging Chinese expansion which is irreversible.
Therefore only a constructive and collective mechanism can assure an amicable management of this new reality in the Mediterranean and Europe which is conspicuously absent so far. The contemporary Europe is in the throes of rising tides of nationalism and promotion of national interests which cause the absence of collective response and decision based on competitive national interests and Italy signed for multibillion-dollar BRI of China.
Among the 29 agreements the two countries signed in March, 2019 included the management deals between the China Communications Construction Company (CCCC) and the ports of Trieste and Genoa in the norther Adriatic Sea and the Ligurian Sea respectively. The port of Trieste has huge strategic potential for the Chinese BRI framework as it provides link to the landlocked countries of Austria, Hungary, the Czech Republic, Slovakia and Serbia.
The Chinese toehold in this strategic and historic port will ensure it faster access to the interior of Europe with its infrastructural push of of railroad and roadways. The local authorities and business houses are enthusiastically favourable as they see it as restoration of its lost historic prominence of the port city in the emerging European and global stage. This is evident in the words of Zeno D’Agostino, the president of the Trieste port authority that “Fundamentally, what’s happening is that the port of Trieste is returning to the logistical role for Europe that it had for old Austro-Hungarian empire.”
Italy explains its stand that its agreements are based on careful perusal of terms and conditions in consonance with its national interests unlike the Greek and their deal of port Piraeus with China. Moreover, they have screening mechanism for foreign investments and gingered up its “golden powers” (amended and came into force on 12th July, 2019), which empowers the state to intervene in deals involving companies operating in the strategic sectors of defence, national security, communications, energy and transport.
The ‘golden power law’ amended on 8th April, 2020, as per the EU Guidelines published on 25th March, 2020 has tightened the foreign investments in taking over the weaker companies. Yet, there is a need of proper mechanism to scrutinise the process to avoid the predatory investment in the light of financial distress under the Covid-19 pandemic.
Impact of COVID-19 and Domestic Politics of Italy
The trajectory of the China-Italy relationship has started showing the impact of the pandemic. The Chinese pandemic diplomacy led to sending of medical expert teams and equipment to Italy. A survey published in the first week of April revealed that over 50% of Italians consider China as a friend which is 42% more than last year compared to 30% for the United States. Besides, around 36% Italians view China as important partner for developing alliances beyond the European Union. The pandemic has thus strengthened the China-Italy ties but the European solidarity remains the top priority for Italy.
Despite the majority supportive opinion of the Survey, Italian political parties hold divergent views which are very crucial for long term sustenance of the relationship. While the Five Star movement (M5S) considers China important for investment and international status of Italy, the centre-left, Democratic Party, the coalition partner is concerned about many-sided costs of proximity to China and instead stressed for closer ties and commitment with traditional allies, particularly the European Union. The opposition right-wing party, the Lega and the Brothers of Italy, is extremely critical of close foreign ties. Their likely win in the next election can be a difficult obstacle. Despite these obstacles, Italy’s commercial, financial and cultural relations with China remain crucial for its national interests.
Concerns of EU, NATO and the United States
The Chinese expansion in the Mediterranean is not a direct military threat and attack but their growing seamless routes, trade and investment are establishing China in a dominant position in Europe. Under the Chinese law, all commercial ports have an obligation of providing logistical support to the country’s military in their time of need when requested for. The precedent of intertwined economic and strategic Chinese policy and its result in the Srilankan port of Hambantota has made the European critically sceptical.
The Chinese influences on European ports with ownership, substantial and minority shares in their management is huge and paramount from Rotterdam (China owns 35% in Euromax which runs the port) North Sea to Kunport, third largest port of Turkey and Haifa and Ashdod in Israel in the Eastern Mediterranean. It is believed that control of these ports management and related infrastructure by the state-owned companies Chinese military can be able to access the security and intelligence communications.
There is no investment screening mechanism at the EU level and only 15 out of 28 EU members have such mechanism. On 5th April, 2019, EU has decided to put in place a centralised FDI screening mechanism. The security concerns of NATO is based on its perceived applications of Artificial Intelligence, Robotics, Quantum computing for cyber espionage, strategic and military applications by the Chinese through their influence on infrastructure and strategic assets like ports with serious consequences for NATO security, structure, apparatus and communications.
With the use of Huawei 5G, the Chinese can peep into NATO intelligence and coordination communication would seriously be compromised. Expanding control of key European ports by Chinese state-owned companies and allied railroad and utilities would dent severely naval operation of NATO in its own stronghold, the Mediterranean. This threat is further compounded by the increasing manifestation of Sino-Russian nexus which has become a grim reality with their joint naval exercises in Mediterranean, Baltic and Black Sea in the recent years.
Immediate Responses Needed
The Security Doctrine of NATO must be expanded and China to be included along with Russia in its security ambit. It needs global response of Chinese rise to balance it in every sector including the Indo-Pacific, Indian Ocean and even South China Sea by making necessary cooperation with partners in every region like Japan, Australia, India and ASEAN countries. There are suggestions of having an enhanced permanent NATO military base in the Indo-Pacific and NATO maritime task force in the South China Sea. But success of all these depend on convergence of interests and policy coordination which seems to be squarely lacking.
The sense of threat seems to get bigger with the growing division and transatlantic divergence among the NATO members in a range of issues from NATO funding, Palestine, US withdrawal from Iran Nuclear Deal, Climate change, Open Skies Treaty to the latest proposed expansion of G-7 and inviting back Russia in the group. The “America First” emphasis of President Donald Trump has already set in motion an unprecedented consternation among the European partners for their economic and security future. This growing unassured environment of US commitments is responsible for national responses of the European countries instead of a collective one.
Therefore, European Union shares the concerns of Chinese rise with the US but will not adopt a confrontational policy of the US towards the country. Instead the EU countries will try to device and pursue a policy based on constructive balance of their interests and gradual accommodation with China through cooperative dialogue. China has agreed to discuss with EU to make necessary reforms to accommodate the European concerns and conclude a Comprehensive Agreement on Investment this year (2020). Thus Europe can adjust its interests and maintain its strategic importance in the wake of receding US commitments and expanding Chinese influences as a relevant player in the emerging World Order.
Dr Khushnam P N Independent IR and Regional Security Researcher and Analyst (Theories of IR & Regional Security, Politics and Security in West Asia, Indian Foreign Policy, Iran-Israel & US, Indo-Pacific, Geopolitics and Multilateralism). Specialization: Iran, US & Gulf Security. Bangalore, India