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Old 03-19-2019, 09:24 PM   #1
Carlin15
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Default A Forgotten Italian Port Could Become a Chinese Gateway to Europe

A Forgotten Italian Port Could Become a Chinese Gateway to Europe

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https://www.nytimes.com/2019/03/18/w...belt-road.html

By Jason Horowitz
March 18, 2019

TRIESTE, Italy — For centuries, this cosmopolitan port city at the northern tip of Italy’s Adriatic coast acted as a geographic pivot point between empires. Then, for nearly 70 years, Trieste’s geopolitical star dimmed and its old world mishmash of central European cultures grew stale, like an old strudel in one of its elegant cafes.

Now, courtesy of a rising China, Trieste appears ready to return to the center of a realigning world.


This week, President Xi Jinping of China arrives in Rome for a state visit in which Italy is expected to become the first Group of 7 nation to participate in China’s vast One Belt, One Road infrastructure project. The symbolism is striking — a powerful China drives a crack in the economic alliance that once dominated the globe and delivers a major blow to a Trump administration that has been critical of the Belt and Road Initiative.

For Italy, the deal would open the country to greater Chinese infrastructure investment, particularly in ports like Trieste. Officials here say they expect Beijing-backed conglomerates, such as the China Communications Construction Company, to bid hundreds of millions of euros for infrastructure concessions.

For China, having a toehold in one of Europe’s historic ports would bring favorable customs conditions, a faster trade route to the heart of the Continent and direct access to railroads for moving its goods into the European Union.

“Fundamentally, what’s happening is that the port of Trieste is returning to the logistical role for Europe that it had for the old Austro-Hungarian empire,” said Zeno D’Agostino, the president of the Trieste port authority, whose office is sprinkled with gifts from Chinese delegations and a book about European-Chinese cultural relations.

To walk through Trieste is to witness how the city has already opened to China. Chinese tourists shop for the city’s trademark Illy coffee and take pictures with their Huawei phones of the elegant Caffè Degli Specchi. A brand-new cruise ship, built in nearby shipyards expressly for Chinese passengers, is docked in the central waterfront piazza, preparing to set sail on Marco Polo’s path to the Far East.

Most significant, construction workers in scuba gear have been laying foundations near the site where a new pier is expected to become China’s home in the industrial port. In the years after World War II, the Americans held great sway in Trieste, and Washington has now sought, so far unsuccessfully, to stop Italy’s deal with Mr. Xi, characterizing the Belt and Road Initiative as an economic and potentially military threat.

While other members of the European Union, including France and Germany, have also expressed reservations about the deal with China, supporters in Italy say that there is nothing to worry about and that the critics are merely upset that Trieste — and other Italian ports, like Genoa and Palermo — are going to cut in on their business. They reject comparisons to the port of Piraeus in Greece, which China essentially bought, and say Italian law makes such an acquisition or the laying of Chinese debt traps impossible.

Michele Geraci, an Italian economic development minister who is running the negotiations with Beijing, said in an interview that Chinese ships carrying materials from home or its vast network of interests in Africa through the Suez Canal simply needed to get their goods to central European markets as quickly as possible.

“Trieste meets that requirement swiftly,” he said.

Italian officials say their American counterparts initially seemed disinterested in the deal. Deputy Prime Minister Luigi Di Maio, the leader of the Five Star Movement, has made several trips to China in recent months, nearly signing the accord during a November visit to Beijing, they said. After the fact, American diplomats began making their case, but the Italians said the deal was noticeably not on the American radar during recent high-level meetings in Washington.

But this month, Garrett Marquis, spokesman for the American national security adviser, John R. Bolton, sharply attacked the deal in a Twitter post and in several interviews, while the National Security Council’s official Twitter account also issued a reproach on March 9.

“Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people,” the tweet stated, referring to the Belt and Road Initiative.

The Americans have also tried to pressure leaders of the nationalist League party, which is part of the governing coalition in Italy. This month, Trump administration officials and, separately, the former White House official Stephen K. Bannon, met with party leaders; Mr. Bannon said that he had warned his Italian allies in the League against what he called China’s “British East India Company model of predatory capitalism.”

Awakened to the growing Chinese influence, American officials have had more success pushing Italy to avoid using the new 5G networks of the Chinese electronics giant Huawei, which Washington warns could be used by Beijing to disrupt and spy on communications networks. In recent days, the Italians have excised any mention of technology and communications from the Belt and Road agreement, people familiar with the negotiations said.

In Trieste, city leaders are focused on the economic benefits to the port.

Beyond its convenient location, the city on Monday celebrated the 300th anniversary of Emperor Charles VI of Austria declaring it a “free port.” That status still confers special privileges, with no customs charges or time limits on storage for goods.

If the deal goes through, proponents say they envision Chinese companies working with Italian counterparts, hiring local laborers to assemble imported goods before putting them on trains to the rest of Europe or on ships back to China. If the amount of work and components used measure up to customs requirements, those products could be labeled Made in Italy.

But some business leaders say that fully embracing the Belt and Road program would bring risks and could complicate efforts to bring other investment to Trieste.

Vittorio Petrucco, chairman of I.CO.P, a construction company doing work in the port, said he and a former Microsoft consultant in Trieste, which has a vibrant research sector, had begun exploring his “dream” of building an underwater data center that would cool the servers of American tech giants.

“I prefer to look West instead of East,” Mr. Petrucco said of his project, planned for an area near an old ironworks factory that looms above the pier envisioned for use by the Chinese. He added that both projects would take years to build and worried that all the American opposition and controversy surrounding the Belt and Road agreement would poison the waters for his proposal.

“It’s sad,” he said, “but there’s nothing I can do about it.”

Roberto Dipiazza, the mayor of Trieste, said that the United States could scuttle the deal if it really wanted to. He said that his city had much to gain from closer ties to China, but that the Chinese had even more to gain from his port’s deep harbors, customs benefits and rail yards.

“We will find a point of agreement between China and the U.S.,” he said, showing off a Make America Great Again cap signed by President Trump that he had received as a gift. Italy, he noted, was caught “in the middle.”

Some of Trieste’s most entrenched political players think Italy is compromised by such a position.

Giulio Camber, a veteran lawmaker considered by many to be the political boss of Trieste, said he no longer had any interests in the port, and that his opposition to the deal was motivated by his distrust of what he called China’s Communist dictatorship.

As light sliced in through the closed curtains of his office, illuminating his cigarette smoke, gilded furniture and oil paintings, Mr. Camber said the Chinese were behind many of the Turkish businesses exporting goods into the port. Beijing, he said, would feast on the Italians just as they did on the Greeks before them.

“They are the weakest,” he said of the Mediterranean countries.

Mr. Camber dismissed the local and national assurances about Chinese expansion, saying that Beijing would easily outmaneuver officials in Rome.

“It’s like the world champion in chess playing with a couple of guys who play for fun at the Caffè Degli Specchi,” he said, referring to the famous cafe in Trieste’s main square, the Piazza Unità d’Italia. “You can’t imagine what the world’s best chess player is up to.”


How China Is Taking Over Europe’s Ports - video
https://www.youtube.com/watch?v=_XHdGPT11fk

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Old 03-19-2019, 09:54 PM   #2
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“It’s like the world champion in chess playing with a couple of guys who play for fun at the Caffè Degli Specchi,” he said, referring to the famous cafe in Trieste’s main square, the Piazza Unità d’Italia. “You can’t imagine what the world’s best chess player is up to.”
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Old 06-12-2019, 10:05 PM   #3
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China’s President Xi Jinping in Italy: It’s the Maritime Ports

https://www.globalresearch.ca/xi-jin...-ports/5673397

By F. William Engdahl
April 02, 2019

To the concern of Germany, France, Holland and other EU countries, Italy’s coalition has just signed a Memorandum of Understanding with China to join China’s Belt Road Initiative, the so-called New Economic Silk Road. Italy is the only industrial G7 country so far to opt in to the BRI. The China deal has the potential to change the geopolitics of not only the EU but also most of the world. It’s about who controls which major maritime ports of world commerce.

While much attention has focused on the role of high-speed rail infrastructure as the backbone of the ambitious China BRI project, little attention has been so far given to what may be a far more strategic geopolitical development in China’s BRI, namely China’s ability to own or control the most vital ports of Asia, of Africa, major parts of Latin America and now,evidently, of the European Union.

During Xi Jinping’s Italy talks, the two sides signed a non-binding Memorandum of Understanding (MOU) for various business deals between Italian and Chinese state companies in agriculture, finance and energy. The actual deals signed totaled $2.8 billion for 29 projects, with possible expansion up to $20 billion, hardly yet a game-changer for economically distressed Italy.

The heart of the MOU for China, however, is the potential for Chinese investment in Italian ports, notably Genoa, possibly Palermo and Trieste where China’s Communications and Construction Company will be given access to the port of Trieste on the Adriatic Sea to enable links to central and eastern Europe.

The Chinese inroads with the Italian government are strongly opposed by not only Washington, but also by Brussels, especially Germany and France. They argue that the bilateral Italy-China BRI agreements for port and infrastructure development run counter to the larger established EU transportation strategies. The more honest reasons perhaps are growing alarm in Hamburg and Rotterdam and Antwerp, Belgium over potential loss of shipping trade to southern Europe. By expanding its port presence from Greece into Italy, China potentially gains a huge trade infrastructure advantage in EU trade terms via southern Europe.

The Greek Precedent

Apparently, the Italian government is hoping for a repeat of what they see with Chinese investment in a run-down Greek port,as a way to revitalize the Italian economy as a transit hub between Europe and Asia.

In 2016 the China state-owned China Ocean Shipping Company (COSCO) bought Piraeus port in Greece as part of the Maritime Silk Road plan. COSCO is the world’s fourth largest container shipping company and the second largest port operator. The deal included construction of a new dock, with new cranes installed, increasing the annual container traffic dramatically. Since 2009 when China first came, the cargo volume of the Piraeus container terminal has increased fivefold, and general commercial activity tripled.

Ports of the World

With little fanfare, over the past several years China has invested in or bought key ports around the world as part of its vast Belt, Road Initiative infrastructure strategy. According to China’s Ministry of Transport, Chinese companies have participated in the construction and operation of a total of 42 ports in 34 countries under its Belt and Road initiative.

In the EU,China has made substantial investment aside from Piraeus. In 2018 COSCO became a major investor in Belgium’s second largest container port at Bruges (Zeebrugge). The Belgian port of Zeebrugge is expected to become a new hub of the Belt and Road initiative. Zeebrugge, or the port of Bruges, is the second largest container port in Belgium after Antwerp, and the sixth in the Channel-North Sea region (2016). It is also the leading European port for car transportation.

On January 22, 2018, China’s COSCO officially secured the concession of Zeebrugge’s container port, the first terminal in Northwest Europe in which Cosco Shipping Ports holds a controlling stake. They are also engaged in Antwerp and Rotterdam.

Extending the map of China’s Maritime Silk Road, in the five years since the BRI was officially announced, China has invested in port projects across Africa from Tanzania to South Africa to Morocco. The keystone is their investment in Egypt’s Suez Canal, the strategic passage from China via the Indian Ocean and Red Sea into the Mediterranean on to the markets of the European Union. China is the major investor in the joint China-Egypt Suez Economic and Trade Cooperation Zone.

In China, the country today has seven of the world’s largest container ports, all of them modern, with state-of-art automation. The Port of Shanghai is the world’s biggest by volume, far larger than Rotterdam, Antwerp or Hamburg in the EU. While high-speed rail networks catch the imagination around land links between China and Eurasia in the BRI, sea shipping is far the most vital for China trade. Some 90% of all world trade today is by ship.

EU Angst?

The latest China interest in investing in ports in Italy should be seen in this light. Recently the EU and large states such as Germany and France have expressed alarm over the extent of Chinese infrastructure and corporate investment in the EU. On March 12 the EU Commission issued a position paper titled, “EU-China – A strategic outlook.” Among other points it struck a new, alarmist note in the economic relations of the EU’s second most important trading partner after he USA. The report stated, “China is, simultaneously, in different policy areas, a cooperation partner…an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance.”

It marks the first time at that level that the EU has labeled China a “systemic rival.” The new EU China paper recommends among other things that the WTO be reformed to force China to eliminate state industry subsidies; develop an EU Industrial Policy that would allow EU firms to better compete with the huge China state enterprises. The EU paper echoes a January paper by the German industry federation, BDI, which, declared that China, using its central state industrial policies, was now a “systemic competitor.”

The German government is planning to introduce new laws that could block foreign takeover of any German company considered strategic. That’s a radical departure from their postwar market policies, and came after a Chinese state company bought the advanced German automated machine tool company Kuka. Kuka is one of the world’s leading suppliers of robotics as well plant manufacturing and system technology and a pioneer in Industrie 4.0 on which China bases much of its Made in China 2025 strategy to become world leader in ten advanced industrial sectors.

German and French economics ministers have joined to call on the EU to allow member states to approve industrial mergers that Brussels presently bans on narrow EU grounds. When China joined the WTO in 2001, German industry exported quality German cars and machine tools in return for Chinese mass textiles and cheap consumer goods. Those days are gone. Today China carmaker Geely owns Sweden’s Volvo, and is a major shareholder in the Mercedes Daimler group where they are finalizing purchase of the Mercedes Smart car division. China’s state ChemChina chemicals giant recently bought Swiss Syngenta, a major force in GMO patented seeds and agriculture chemicals. The list is long.

The growing EU concern with the emergence of China as an industrial rival with Chinese companies, making and exporting goods that EU companies long held the advantage, is only beginning to be discussed openly. It has in part to do with the realization by large parts of EU Industry that the much-touted “Made in China:2025” national industrial strategy is not just about upgrading China to a modern state-of-the-art industrial producing nation, but, by between 2030 and 2040, into the world leader, the economic El Supremo.

There is a growing alarm across the EU that that rise would be at the expense of leading EU industrial groups. It takes little to imagine within several years that the container ships from China’s mega ports will be shipping Chinese-owned and manufactured cars or machine tools to compete in the EU market using their ultra-modernized ports in Greece and Italy.

When Xi Jinping went from Italy to meet France’s embattled President Macron on March 26, Macron took an unusual step and invited German Chancellor Merkel and EU Commission President Juncker to join to form appearance of a united bloc to the overwhelming economic challenge of the Chinese.

Two days before the Xi visit to Paris Macron told the press that, “the period of European naivety” regarding the EU’s relations with China is over. He cryptically added, “The relationship between the EU and China must not be first and foremost a trading one, but a geopolitical and strategic relationship.”

France and Germany to date have resisted any formal EU cooperation with China’s Belt, Road Initiative and have pressured individual EU countries such as Italy not to make bilateral deals with China. But the reality is that the EU is largely dysfunctional in terms of modern industrial strategy. In this sense the Xi Jinping Italy BRI agreements can well be a trigger for a global geopolitical tectonic shift. How that will look in the future is impossible to say. At present, it appears Beijing is holding the stronger cards.
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