Italy signs trade pact with China to renew ties after BRI project exit

Italian Prime Minister Giorgia Meloni, who is on an official visit to Beijing, announced she was signing a three-year action plan to revive cooperation with China.

Italy had last year pulled out of China's Belt and Road Initiative (BRI), having been the only G7 country to sign up in 2019 to the infrastructure and transportation plan that seeks to build a sort of modern-day Silk Road.

The ANSA news agency reported that Meloni made the announcement at the start of a meeting with Chinese Prime Minister Li Qiang in Beijing on July 28.

The Beijing visit marks the first official visit of Meloni since she became PM in 2022.

"I am very happy to be here for this government's first official trip, which has been preceded by several high-level meetings, as a demonstration of the will to start a new phase, to relaunch our bilateral cooperation in the year that marks the 20th anniversary of our global strategic partnership," Meloni was quoted as saying by ANSA.

Chinese ambassador to Italy, Jia Guide said that on Sunday, Meloni addressed the 7th China Italy Business Forum in Beijing where she also attended the signing ceremony for agreements together with Chinese Premier Li Qiang.

Both countries signed a three-year plan to strengthen collaboration in areas including trade, investment, education, environmental protection and food security." Qiang said in a statement on X

Meloni said that six agreements had been signed in fields ranging from industry to food safety and education.

The Memorandum of Industrial Cooperation signed between the two counties was described by Meloni as "a significant step". "It now includes strategic industrial sectors such as electric mobility and renewables, sectors where China has already been operating on the technological frontier for some time," the Italian PM said.

China has been in trade conflict with the United States and European Union (EU) over electric vehicles (EV), renewable energy goods among others.

Addressing the Italy-China business forum, Meloni termed it as "a great opportunity" to strengthen partnership by reflecting on the strengths and weaknesses, on what has worked and what has not, and to do so with the common goal of making trade relations increasingly fair and advantageous for all."

Italy has a big trade deficit with China and there is also an imbalance when it comes to investments. "Chinese investment in Italy is about a third of the level of Italian investments in China," Meloni was quoted by the Italian news agency.

"It's a gap that I'd like to see narrowed in the right way", she said.

On December 6, 2023, the Italian government formally announced that it will not renew the 2019 memorandum of understanding (MOU) regarding its formal participation in Chinese President Xi Jinping's flagship Belt and Road Initiative (BRI). The initiative was announced a decade ago

According to a report in the Voice of America, Italian President Sergio Mattarella plans to visit China this October, and the US media outlet analysts say the trips show that Rome hopes to repair relations damaged when Italy became the first country to pull out of the BRI since it was launched in 2013.

As per the VOA report, Italy is China's fourth-largest trading partner in the European Union, and China is Italy's largest trading partner in Asia, with bilateral trade at $ 80 billion, mostly Chinese exports to Italy.

Italian data show exports to China reached nearly $ 18 billion in 2022 from $ 14 billion in 2019, while Chinese exports to Italy nearly doubled during that same period from more than $ 34 billion to more than $ 62 billion.