The Belt and Road Initiative Impact on Europe: An Italian Perspective

• DOI: http://doi.org/10.1111/cwe.12217
• Date: 01 September 2017
• Author: Giorgio Prodi,Enrico Fardella
• Published date: 01 September 2017

©2017 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 125–138, Vol. 25, No. 5, 2017

125

The Belt and Road Initiative Impact on Europe:

An Italian Perspective

Enrico Fardella, Giorgio Prodi*1

Abstract

This paper analyzes the impact of the Belt and Road Initiative on Europe with a specic

focus on Italy. We concentrate on the impact of new railways and port infrastructures on

bilateral trade. Our analysis suggests that the development of new railway connections

will benet most of the Northern and Central European countries. Some industries like

automotive and electronics that have a higher value to weight ratio will benet more

than others. However, due to higher costs, railway services will never reach a high

percentage of total import/export ows. Investment in new port facilities, although less

“new” compared with railways, may be a bigger game changer. The development of

the Port of Piraeus has already increased the importance of the Mediterranean Sea as

an import/export hub for China. If the other planned investments in Egypt and Algeria

are completed, this phenomenon will be magnied. This presents a huge challenge for

Italy. The Italian port in the high Adriatic Sea could be displaced by Piraeus capacity,

especially if this port is linked through railways with the center of Europe. Italy needs

to coordinate its ports together with its railway network to take advantage of Belt and

Road Initiative opportunities.

Key words: Belt and Road, China, Europe, infrastructure, Mediterranean

JEL codes: F61, L52, L91, R58

I. Introduction

The recent setbacks of the Trans-Pacic Partnership (TPP) and the Transatlantic Trade

and Investment Partnership (TTIP) raised questions about the future of globalization and

the USA’s role in it. The Belt and Road Initiative (BRI), launched in 2013 by President

Xi Jinping, came to be the only existing international initiative with a global horizon,

and is China’s alternative proposal for the future of the global system.

Born as a natural evolution of the “Western Development Strategy,” aimed at the

*Enrico Fardella, Tenured Associate Professor and Executive Director, Centre for Mediterranean Area Studies,

History Department, Peking University, China. Email: enricofardella@gmail.com; Giorgio Prodi, Associate

Professor. Department of Economics and Management, Ferrara University, Italy. Email: giorgio.prodi@unife.

it.