Italy Withdraws from Belt and Road Initiative Amid Europe's Reevaluation of China Ties

Subscribe to CNN's Meanwhile in China newsletter to stay informed about the country's growing influence and its impact on the world. Italy, the sole G7 member to participate in China's Belt and Road Initiative, will withdraw from the global infrastructure program when its contract ends next year, reflecting the increasing resistance in Europe towards Beijing and its global aspirations.

Prime Minister Giorgia Meloni confirmed on Thursday that she will fulfill her campaign pledge to end the deal signed with China in 2019, which many felt had not significantly benefited Italy's economy. Despite this decision, Meloni emphasized that Italy could still maintain positive relations with Beijing outside of the program. This move comes as the program has raised concerns about China's increasing global influence and the potentially unmanageable debt it has placed on some countries.

Meloni told reporters that there is a need to enhance cooperation with China on trade and the economy, as she made her first public comments on the issue following reports that Italy had informed China of its decision not to extend the pact after it expires in March 2024.

She also stated that the tool of the BRI has not yielded the anticipated results.

Italy's decision comes as the European Union has begun a campaign to "de-risk" its supply chains from China and secure sensitive technologies, following its designation of Beijing as a "systemic rival" in 2019. The tensions were evident during a summit between EU leaders and Chinese president Xi Jinping in Beijing, where the two sides grappled with various issues, from trade to Russia's involvement in Ukraine, resulting in minimal progress.

During a regular press briefing on Thursday, the Chinese Foreign Ministry responded to the Italian withdrawal with a balanced approach. Spokesperson Wang Wenbin emphasized the significant appeal and global impact of Belt and Road cooperation, while firmly opposing any efforts to undermine or create division within the initiative, without specifically mentioning Italy.

Wicked decision

Over the past decade, China has signed deals with over 140 countries for collaboration on a program that has invested billions of dollars into infrastructure projects such as roads, ports, airports, and bridges, primarily in the Global South.

Italys decision to join the scheme in 2019 was widely seen at the time as a diplomatic win for Beijing - and drew criticism from Washington and Brussels.

In this photo from last December, Charles Michel, President of the European Council, meets Chinese President Xi Jinping in Beijing.

EU/EyePress News/Reuters

European leaders have traveled to Beijing with a set of worries. Will China's President Xi Jinping be receptive? In a summer interview with the newspaper Corriere della Sera, Italian Defense Minister Guido Crosetto criticized the 2019 decision as "wicked," pointing to increasing trade imbalances between the two countries.

Italian exports to China increased to $26.9 billion last year from $21.4 billion in 2019, while Chinese exports to Italy grew to $50.5 billion from $33.5 billion during the same period, according to China's customs data. Former China-friendly Prime Minister Giuseppe Conte criticized the withdrawal from the scheme, condemning it for "ideological reasons" and warning that it could hinder the potential expansion of Italian exports.

Earlier this year, Chinese Ambassador to Italy Jia Guide warned that withdrawing from the pact would negatively impact cooperation. Italian leaders have been cautious about the withdrawal, with Meloni suggesting the possibility of maintaining good relations with China outside the Belt and Road plan. She has also denied speculation that the United States pressured her to exit the scheme.

EU meeting in Beijing

The news of Romes withdrawal came as the delegation of top European Union officials arrived in Beijing for the first in-person EU-China summit in four years.

Chinese leaders viewed the meeting as a crucial chance to improve strained relations with Europe, which Beijing sees as a significant potential ally in its rivalry with the United States. "We should not see each other as competitors simply because our systems are different, limit cooperation due to competition, or resort to confrontation because of disagreements," Xi told the visiting leaders, as per China's official statement.

European Commission President Ursula von der Leyen and European Council President Charles Michel raised concerns about the significant trade deficit and unfair competition with Xi and Chinese Premier Li Qiang. In response, Li urged the EU to use cautious and non-restrictive economic policies. Despite the summit not providing concrete solutions, Von der Leyen stated that both sides agreed on the importance of having balanced trade relations.

The EU side would be looking for "concrete progress following these discussions," the bloc said in a statement after the meeting.

CNNs Barbie Latza Nadeau in Rome contributed to this report.