Italy on the new Silk Road
Lesson Date : 2019-04-15
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Guiseppe Conte is the prime minister of Italy. Xi Jinping is China's president. On March 10, Mr. Xi traveled to Italy for a two-day visit. During it, he and Mr. Conte signed an agreement. It means that Italy is likely to join China's Belt and Road Initiative (BRI).
Italy has the world's tenth largest economy. It is a member of the G7 (Group of Seven) and the European (EU). The G7 are the world’s seven most advanced countries that have democratically elected governments (Canada, France, Germany, Italy, Japan, Britain, and the U.S.). If it joins China’s BRI, Italy would be the first G7 and EU member to do so. Italy's decision to support the BRI angered EU and U.S. leaders.
Mr. Xi introduced the Belt and Road Initiative five years ago. It is a huge trade and infrastructure project. The BRI links China to Asia, Africa and Europe. It is meant to be two-way. Goods and services from China can move to Asia, Africa and Europe more easily. Equally, they can move in the opposite direction.
Some people describe the BRI as modern-day Silk Road. This was an important overland trading route in the past. It was used for 2,500 years. The Silk Road connected the eastern Mediterranean and China. Then, traders bought silk from China and transported it to Europe. The Silk Road followed several routes between different cities and town.
The BRI includes two routes. The Belt is overland and the Road is a sea route. The overland route is a series of railroads and highways. The sea route is a number of high-tech ports. Here, modern cargo ships can load and unload their containers. China provides the loans, or funds, to build the railroads, highways and ports. Chinese banks lend the money to the country in which they are built. The country has to repay this money over a long period. In less developed nations, Chinese companies build the infrastructure. So far, over 100 BRI projects have been completed. In Italy, two potential projects are the rebuilding of the old ports at Trieste and Genoa.
Italy's economy has not grown for the past ten years. Its youth unemployment is very high. The country has large debts because previous governments have borrowed large amounts of money. Now, it is difficult for the Italian government to pay for big infrastructure projects.
EU leaders do not want Italy to make its own agreement with China. They say that EU officials should negotiate trade agreements for all EU member countries. Most European countries and the U.S. usually work together. Currently, there is a trade dispute between the U.S. and China. The U.S. government is unhappy because China sells many items to the U.S. Yet, far fewer American-made goods are sold to China. The U.S. wants European countries to trade more with America and not China.
Some people argue that the BRI favors Chinese goods and construction companies. They worry that Chinese influence becomes greater in countries that join the BRI. This is because they would be indebted to Chinese banks for many years in the future.
ISSUES : Is the Belt and Road Initiative a good idea?
Period : 2019-04-15 ~ 2019-05-15
Manager's Pro OpinionYes, the Belt and Road Initiative is a good idea. It aims to connect China to Asia, Africa and Europe. With this modern-day infrastructure, trading between nations will be much easier. It should boost the economy of many countries. The Belt and Road Initiative is important for globalization. With this initiative, less developed nations will have new railroads, highways and ports. These infrastructure projects will also create many jobs for local people.
Manager's Con OpinionNo, the Belt and Road Initiative is not a good idea. The cost of the BRI is too high. It may or may not improve the economy. To build infrastructure for the BRI, many nations will have to accept loans from Chinese banks. These nations will be indebted for many years to come. Some may not be able to repay the loans. Second, building new ports, railroads and highways across the three continents is likely to cause significant environmental damage.
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