Italy First G7 Country to Join China's 'New Silk Road'

China's President Xi Jinping and Italy's Prime Minister Giuseppe Conte signed a Memorandum of Understanding (MOU) Saturday to collaborate on the development of a "New Silk Road," a huge infrastructure project through which Beijing hopes to boost its trade with European countries, with the United States and the European Union (EU), so far, expressing reticence on the initiative.

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The agreement reached between Xi and Conte has a special meaning since it makes Italy the first country in the Group of Seven (G7) to  sign on. Created in the late 1970s, the G7 Group includes Canada, France, Germany, Italy, Japan, the U.K. and the U.S, which together control about 58 percent of global net wealth.

By joining the Chinese Silk Road, Italy is opening itself up to an international multimodal transport infrastructure network to connect economies in Europe, the Middle East, Africa and even Latin America. Within this framework, Italian ports become ideal points for the arrival of goods, services and investments.

The MOU covers 29 specific agreements between companies and institutions in both countries. One of them is a strategic partnership between the Bank of China; Cassa Depositi e Prestiti (CDP), a prominent Italian investment bank founded in 1850; and Ente Nazionale Idrocarburi (ENI), one of the world's biggest multinational oil companies. The CDP also established commitments with Snam, a Chinese natural gas infrastructure company.​​​​​​​​​​​​​​

“The Silk Road. First stop Rotterdam, Holland (EU founder country). By train from China to Rotterdam ... The EU policy against Italy seems clear.”

There will be also technological collaboration for the development of gas turbines between Ansaldo Energia and Chinese companies such as Benxi Steel Group, China United Gas Turbine Technology and Shanghai Electric Gas Turbine Co.​​​​​​​

Both countries pledged to promote the "Italian lifestyle" in China by fostering cooperation between the Italian Trade & Investment Agency (Agenzia ICE) and the Suning,  one of the largest non-government retailers in China.

In terms of infrastructure, there is an agreement between the Eastern Adriatic Sea Port Authority and China Communications Construction Company (CCCC), which is a multinational engaged in the design, construction and operation of infrastructure assets. The CCCC will also work with both the Special Commission for Genoa's Reconstruction and the Ligurian Sea Port Authority System.

The MOU also includes agreements for developing joint partnerships outside of Italy. For instance, Qingdao City will work with Intesa Sanpaolo, the largest Italian banking group. In addition, a deal was reached to build a steel plant in Azerbaijan with the Italian company Danieli and C. Officine Meccaniche and China's CAMC Engineering.

Full details of the contracts, however, were not revealed yet, but they could potentially be worth up to US$22.62 billion​​​​, as Reuters reported.