OBOR Current Affairs - 2019
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Italy’s Prime Minister Giuseppe Conte signed a memorandum of understanding (MoU) with Chinese President Xi Jinping in Rome, endorsing the global infrastructure-building scheme of China. Despite the warnings and pressure from the US and the Europen Union, Italy has joined the china’s mega connectivity scheme and has become the first G7 country to do so. Italy is the thirteenth European Union country and also the first from Western Europe to join China’s Belt Road Initiative.
Why did Italy join the initiative?
Italy has stated that its participation in the initiative through a non-binding agreement was aimed to “rebalance an imbalance” in Sino-Italian trade. There are a lot of ‘Made in China’ coming into Italy and too little ‘Made in Italy’ that goes into China. Italy hopes for a substantial and gradual increase in exports to balance out the trade imbalances.
The decision of Italy is seen as an attempt to address its financial woes which has onerous public debt. Italy fell into recession at the end of last year. The agreement is seen as a trade off wherein Italy needs investment and China has those to provide. The agreement will aid Italy to underpin and strengthen its business ties with China.
The paper released by the EU’s diplomatic arm referred to Belt Road Initiative as a “systemic rival” and has threatened to tighten regulations on Chinese investment in Europe.
Singapore and China have inked Memorandum of Understanding (MOU) to promote greater collaboration between companies from both countries in third-party markets along China’s ambitious Belt and Road routes.
The MoU will see the formation of a working group between Singapore’s Ministry of Trade and Industry (MTI), China’s National Development and Reform Commission and Enterprise.
The working group will identify sectors and markets of mutual interest, organise business-matching activities and forums to facilitate third-party market cooperation between Singapore and Chinese companies under Belt and Road Initiative (BRI). Under it, both countries will work with commercial and policy banks, insurers and financial institutions to support financing and project structuring needs of third-party market ventures under BRI by companies from both sides.
Belt and Road Initiative (BRI)
BRI is an ambitious China’s ambitious development strategy and framework that aims to boost its connectivity and trade that will that will connect Asia, Africa, Middle East and Europe. It was proposed by Chinese President Xi Jinping in 2013. It comprises two components viz. the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The initiative is part of China’s revived 21st century Silk Road diplomacy that seeks to push it to take a bigger role in global affairs as a major global power. It is basically investment and trade promotion scheme aiming to deepen economic connections between China and rest of the world.