Italy’s Exit from the Belt and Road Initiative　European Economic Strategy in an Era of Great-Power Competition

— A Recalculation of Returns, Alliances, and Institutional Rationality —

Executive Summary

Italy’s decision to withdraw from China’s Belt and Road Initiative (BRI) should not be interpreted as an ideological shift toward anti-China policies. Rather, it reflects a rational recalibration driven by four interlinked factors: limited economic returns, security and alliance considerations, misalignment with evolving EU frameworks, and domestic political change. This report positions Italy’s exit as a representative case of how mid-sized European economies are redefining optimal distance from China amid intensifying U.S.–China rivalry.

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Chapter 1. Why Italy’s Withdrawal Matters

In 2019, Italy became the only G7 country to formally join the BRI through a government-to-government memorandum. At the time, Rome framed the move as purely economic—aimed at boosting exports, attracting investment, and leveraging ports such as Trieste as logistics hubs.

Several years later, Italy allowed the agreement to lapse, opting for a quiet, non-confrontational exit. This decision is emblematic not only of Italy’s reassessment, but of a broader European rethink about how to engage China without incurring disproportionate strategic costs.

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Chapter 2. Economic Assessment: What Did BRI Deliver?

2.1 Expectations

Italy’s participation was expected to:

• Expand exports to the Chinese market
• Channel Chinese investment into ports and infrastructure
• Support growth in economically lagging regions

2.2 Outcomes

Empirical outcomes fell short:

• Italy’s structural trade deficit with China did not improve
• Port and infrastructure projects remained modest in scale
• Countries outside the BRI framework—such as Germany and France—outperformed Italy in exports to China

Conclusion: BRI membership did not confer privileged market access. Commercial outcomes continued to depend on firm-level competitiveness and sectoral demand, not on participation in a geopolitical framework.

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Chapter 3. Security Reweighting: The Reality of Alliances

Italy occupies a pivotal geopolitical position in the Mediterranean and remains a core southern pillar of NATO. As U.S.–China tensions increasingly spilled over from economics into security, Chinese involvement in strategic assets—ports, telecommunications, energy—began to carry alliance credibility costs.

Maintaining BRI membership offered limited economic upside while progressively raising coordination frictions with the United States and NATO partners. The cost-benefit balance shifted decisively.

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Chapter 4. Misalignment with EU Institutional Trajectories

At the EU level, China policy has moved toward de-risking rather than decoupling, emphasizing investment screening, economic security, and protection of strategic industries.

Italy’s BRI participation increasingly conflicted with:

• EU-wide investment screening mechanisms
• Common approaches to economic security
• Collective trade-defense measures against unfair competition

This placed Italy in an awkward position—perceived by some partners as diluting EU coherence and by others as insufficiently cautious. Remaining in the BRI raised Italy’s intra-EU negotiation costs without strengthening its leverage.

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Chapter 5. Domestic Politics as the निर्ण निर्ण Decision Factor

The decisive enabling condition was domestic political change. The government led by Giorgia Meloni articulated a clear Atlanticist orientation, prioritizing EU and NATO alignment and adopting a more cautious, rules-based stance toward China.

Crucially, this was not an anti-China pivot:

• Trade relations continue
• Private business ties remain welcome
• Only the state-level strategic framing of BRI was discontinued

In effect, Italy normalized relations with China by removing a politically charged overlay.

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Chapter 6. China-Side Dynamics: The Changing Nature of BRI

China itself has increasingly used the BRI as a geopolitical signaling device, rather than a neutral development platform. Rising instances of economic coercion, opaque investment conditions, and strategic conditionality transformed BRI participation into a political liability for advanced economies.

For Italy, the framework evolved from a potential opportunity into a risk-bearing asset whose maintenance costs exceeded its benefits.

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Conclusion: What Italy’s Exit Tells Us About Europe

Italy’s withdrawal from the BRI is:

• Not a turn from engagement to confrontation
• Not an isolated policy reversal
• But a mature strategic adjustment in a multipolar environment

The decision reflects a European preference to:

• Engage China commercially
• Avoid exclusive geopolitical labeling
• Preserve alliance credibility and institutional coherence

Implications

• Other EU states may reassess BRI-related commitments through a similar lens
• Europe’s China strategy is shifting from “framework participation” to managed, depoliticized engagement
• Italy’s case illustrates how mid-sized advanced economies optimize sovereignty under great-power competition

In sum, Italy’s exit from the BRI is not a retreat—it is evidence of Europe’s strategic learning curve in an era where economics and geopolitics can no longer be separated.