An event of great Geo-political and economic significance took place on Saturday 23rd March. The Italian Prime Minister Giuseppe Conte signed a Memorandum of Understanding (MoU) with President of China Xi Jinping in Rome that links Italy and China in the Belt and Road Initiative (the BRI). Growth in trade and investment is the aim for both parties.
America is furious as they do not wish to see cooperation with China growing anywhere in the world and especially not in Western Europe. The Italians are defiant and determined to find a better future as the EU experiment has simply failed them. They are turning East just like Turkey has recently done and, to some extent, Germany. These three critical NATO nations are slowly but surely turning their backs on the US strategy of complete dominance that has existed since the end of World War Two in 1945. Increased cooperation with China and Russia beckons. Even Saudi Arabia is tentatively doing the same.
China has already purchased investment positions in three large Italian sea ports of Venice, Trieste and Genoa and it owns 51% of the major Greek port of Piraeus. Italy wishes to sell more “Made in Italy” goods not just to China but to all the nations along the Belt and Road routes. Cheap energy supply from the East is also a key part of the equation. The Turkstream natural gas pipeline bringing Russian gas to nations South of the Black Sea was finally completed just 3 days ago on 20th March.
This connection between China and the nations West of China promises more direct trade routes to Eastern Europe, Western Europe, Africa and South East Asia. The Belt and Road Initiative (BRI) is also sometimes referred to as One Belt One Road or The Silk Road. It is a development strategy adopted by the Chinese government in 2013, just 5 short years ago involving infrastructure development and investments in at least 68 countries and international organizations.
The BRI stretches across the Eurasian landmass and is estimated by some to include 65% of the world’s population and 40% of the global gross domestic product. Some estimates of total expenditure by all participating nations are as high as $ 1 Trillion per year for 10 years. That money will be spent on BRI infrastructure, education, construction materials, railways and highways, automobiles, aircraft, real estate, energy grids, iron and steel. That should have huge influence on the economies involved – in Russia, India, Kazakhstan, Belarus, Poland, Singapore, Myanmar, Pakistan, Afghanistan, Iran, Iraq, Krygistan, Turkmenistan, Tajikistan, Uzbekistan, Syria, Lebanon, Jordan, Turkey and on to all the nations of Eastern Europe and then Western Europe where Germany, Italy and France await.
The Maritime BRI Silk Road, also known as the “21st Century Maritime Silk Road” involves the sea route corridors. This is a complementary initiative aimed at promoting collaboration in Southeast Asia, Oceania, and North Africa, through the South China Sea, the South Western Pacific and the Indian Ocean.
Maps of the Belt and Road
There are excellent maps of the Belt and Road Initiative including oil and gas pipelines to be found here: Maps of the Silk Road
Make your own conclusions, do your own research. Avestix does not offer investment advice.
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