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Silk Road: a year later Italy wants to go ahead

Silk Road: a year later Italy wants to go ahead

Rome -  A year ago, on 14 May 2017, Prime Minister Paolo Gentiloni revealed, after meeting Chinese President Xi Jinping at the International Silk Road Summit in Beijing, that the Chinese leadership expressed the "explicit intention" to invest in Trieste and Genoa: "It will happen, we have a date, a commitment" Gentiloni said at the margin of the Beijing Forum on the Belt and Road international cooperation initiative. WHERE ARE WE TODAY? The Belt and Road initiative, launched in 2013 by Xi Jinping with the objective of connecting Asia, Africa and Europe by building 6 sea and land transport corridors along 68 countries (covering 65% of the world's population, and 40% of the world's GDP), is not only a huge infrastructural project, but also a clear sign of Beijing's international ambitions.

This result was achieved through intense diplomatic work. The Prime Minister exploited the good climate set by President Sergio Mattarella's mission to China (February 2017) and was able to explain the Italian proposal to exploit the country's ports. With the Suez Canal doubling in size, the Mediterranean acquired a new central role. China invested in the Piraeus port and is now looking for an access route to move its goods towards the rest of Europe. The Italian government offered a complementary route to the railroad that Beijing plans to build to connect the Greek port to Europe through the Balkans, suggesting the use of existing port and rail systems, such as Trieste. "The Italian ports are not an alternative to Piraeus, they complement it", the Italian ambassador in Beijing, Ettore Sequi, repeated to AGI, "because they are immediately available, well connected and boasting some of the speediest customs procedures in Europe, while Piraeus still requires construction of adequate rail connections through the Balkans.

Furthermore, it would be very difficult to accommodate the vast number of containers reaching the Mediterranean from Asia through just one port of transit". Italy's geographic position confers a strategic role to our ports. The Chinese have appreciated it, and are now thinking of creating a European logistic hub in the North of Italy. Indeed, Cosco (the fourth shipping company in the world) purchased 40% of Vado Ligure: the new container terminal will start operating by 2018.

Some of the investments in Italy have already been launched: in addition to the first Mortara-Chengdu direct rail connection, inaugurated with much pomp last November, but possibly already stalled, there are several operations of the Silk Road Fund, the 40 billion dollar Chinese State Fund that acquired 5% of the Autostrade per l'Italia capital from Atlanta and joined the ChemChina investment in Pirelli in 2015. The Chinese were clearly interested in the port offer. "Investing in Trieste and Genoa, already well connected by rail with European terminals, would enable China to save time and money, because connecting the Greek port to central Europe with a railroad crossing the Balkans is not that easy to do", ambassador Sequi told AGI. 

Beijing follows two official routes: the Pacific route - through the Panama canal - and the Mediterranean route, through the Suez canal. As explained in a long report on Greece as the Chinese door onto the Mediterranean, published by Sette, the Corriere della Sera weekly magazine, Beijing plans to ship goods towards Piraeus through Suez and from here by rail towards central Europe or along minor routes. BRI IN ITALY Italy is yet to sign the Memorandum of Understanding for bilateral cooperation along the New Silk Road, which Beijing requires for countries to officially seal their participation in the initiative. AGI understands that it is currently under negotiation between the two governments.

A year after the Beijing Forum, what is actually happening on the Italy-China front? "Italy has understood the potential and opportunities of promoting its port system", said Sequi. "China has understood the commitment and significance of the Italian offer for its ports and for projects taking place in other countries", he added. Many contacts have been established ("Chinese authorities and businesses already contacted the ports of Trieste, Genoa and Venice to develop new opportunities for cooperation" Chinese ambassador Li Ruiyu confirmed), awareness is clearly rising, but only a few projects are currently underway. Diplomacy carries on: Mattarella, Delrio, Alfano (State visit in February), Gentiloni (May), Calenda (December), Scalfarotto (ten missions in the last year alone). Two MoUs are on the table: one regards Italy's full entry into the Belt and Road initiative, while the other is about Chinese-Italian cooperation in third countries.

Both were proposed by Deputy Prime Minister Ma Kai during his visit last December, when he confirmed  China's interest in strengthening the bilateral relation within the BRI framework. Italy is proceeding with formal negotiations. The government is promoting coordination tables across ministries and administrations, in order to set up targeted tools to support Italian businesses that apply for funds from the AIIB (Asian Infrastructure Investment Bank). "Businesses must present practical projects", Sequi warned. Port promotion is surely next on the list. Representatives of the Italian Port Authorities keep traveling between China and Italy.

From 16 to 18 May, Assoporti (the association of Italian Port Authorities), will bring a strong delegation to Shanghai at one of the key trade shows in Asia, the Transport Logistic China. From Trieste to Taranto, they will all be there. There is a clear opportunity. Just look at the map. "95% of trade between China ed Europe relies on sea shippings", said Sequi. "By nature, sea shipping is not an alternative to rail". Meanwhile, road transport increased: goods transported overland between China and Europe are using a new web of infrastructures that offers huge time savings; approximately 50 lines connect 22 Chinese cities).

The new central role of the Mediterranean in the development of logistic networks is good news not just for Genoa and Trieste, but also for the Adriatic area: the Chinese Piraeus project, which would move goods from the port towards Central and Western Europe through the Balkans, could also have an impact on Trenitalia, which last year acquired full ownership of the Greek operator Trainose. But this project is extremely costly. "Our ports in the north Tyrrhenian and Adriatic coasts are already operational and well connected with the rest of Europe". The challenge also regards the arctic route: betting on ice melting, China plans to use the North East passage to connect to Northern Europe, with Rotterdam as final point (as well as Canada and the USA as an alternative to the Pacific route). The arctic route takes on a new significance: the North-East passage would enable ships to reach their destination earlier than the 48 days needed by Chinese ships to reach Rotterdam through the Suez canal.