Italy Signed a Memorandum of Understanding (MoU) with China

Published on March 26, 2019
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
Italy Signed a Memorandum of Understanding (MoU) with China
China.
  • Despite the warnings and pressure from the US and the Europen Union, Italy has joined 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.

Italy's reason for joining 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 investments to provide to Italy.
  • The agreement will aid Italy to underpin and strengthen its business ties with China.

One must know:

  • 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.

Question:

Q. Which country has joined China's Belt Road Initiative and has become the first G7 country to do so?
a. Italy

b. Spain
c. Denmark
d. Hungary

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