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<blockquote data-quote="Sara Moon" data-source="post: 10194" data-attributes="member: 525"><p><strong><u>4. Italy prepares to endorse China's Belt and Road Initiative - [USER=260]@Abstruser[/USER]</u></strong></p><p><strong>The story:</strong></p><p></p><p>Last Wednesday, Italian officials confirmed that Italy is currently in negotiations to be part of China's Belt and Road Initiative (BRI). By way of background, the BRI is an ambitious infrastructure program that aims to create land and sea trade passages between China and the Middle East, Europe and Africa.</p><p></p><p>Officials have indicated that Italy is likely to sign a formal memorandum of understanding by the end of the month, in time for President Xi Jinping's visit to the country. In an interview with the Financial Times, junior industry minister Michele Geraci stated "We want to make sure that ‘Made in Italy' products can have more success in terms of export volume to China, which is the fastest-growing market in the world."</p><p></p><p>If the signing does take place, Italy will be the first G7 country to formally support the BRI. The vast majority of G7 countries still view China's BRI with a degree of suspicion. In response to Italy's decision, a spokesman for the White House National Security Council stated: "We are sceptical that the Italian government's endorsement will bring any sustained economic benefits to the Italian people, and it may end up harming Italy's global reputation in the long run."</p><p></p><p><strong>Impact on businesses and law firms:</strong></p><p></p><p>At first blush, the connective infrastructure provided by the BRI would seem to allow significant international business opportunities for participant countries. However, the initiative is not without controversy. Many BRI projects (such as high-speed railways) are located in developing economies such as Pakistan and Indonesia, countries which lack the ability to fund such massive projects alone. As such, most BRI projects to date have involved a significant amount of Chinese funding, creating the risk of a ‘debt trap', whereby countries are unable to repay their Chinese debts.</p><p></p><p>A prominent case in point is Sri Lanka. In 2010, Sri Lanka borrowed over $1 billion from China to build a BRI port in Hambantota. However, far from becoming the "major" trade hub as was promised, the Hambantota port was a dismal failure – in 2012, the port only drew 34 ships. As the port failed to generate any income streams, the Sri Lankan government struggled to repay the Chinese debt it had taken on. In 2015, in order to settle its debts, Sri Lanka granted China a 99-year lease of the port and a surrounding 15,000 acres of land.</p><p></p><p>Still, in the short term, should Italy formally join China's BRI, businesses in the construction industry could benefit from Italian infrastructure projects implemented as part of the BRI. Law firms with expertise in project finance could also benefit from advising on the financing of BRI projects in Italy.</p></blockquote><p></p>
[QUOTE="Sara Moon, post: 10194, member: 525"] [B][U]4. Italy prepares to endorse China's Belt and Road Initiative - [USER=260]@Abstruser[/USER][/U] The story:[/B] Last Wednesday, Italian officials confirmed that Italy is currently in negotiations to be part of China's Belt and Road Initiative (BRI). By way of background, the BRI is an ambitious infrastructure program that aims to create land and sea trade passages between China and the Middle East, Europe and Africa. Officials have indicated that Italy is likely to sign a formal memorandum of understanding by the end of the month, in time for President Xi Jinping's visit to the country. In an interview with the Financial Times, junior industry minister Michele Geraci stated "We want to make sure that ‘Made in Italy' products can have more success in terms of export volume to China, which is the fastest-growing market in the world." If the signing does take place, Italy will be the first G7 country to formally support the BRI. The vast majority of G7 countries still view China's BRI with a degree of suspicion. In response to Italy's decision, a spokesman for the White House National Security Council stated: "We are sceptical that the Italian government's endorsement will bring any sustained economic benefits to the Italian people, and it may end up harming Italy's global reputation in the long run." [B]Impact on businesses and law firms:[/B] At first blush, the connective infrastructure provided by the BRI would seem to allow significant international business opportunities for participant countries. However, the initiative is not without controversy. Many BRI projects (such as high-speed railways) are located in developing economies such as Pakistan and Indonesia, countries which lack the ability to fund such massive projects alone. As such, most BRI projects to date have involved a significant amount of Chinese funding, creating the risk of a ‘debt trap', whereby countries are unable to repay their Chinese debts. A prominent case in point is Sri Lanka. In 2010, Sri Lanka borrowed over $1 billion from China to build a BRI port in Hambantota. However, far from becoming the "major" trade hub as was promised, the Hambantota port was a dismal failure – in 2012, the port only drew 34 ships. As the port failed to generate any income streams, the Sri Lankan government struggled to repay the Chinese debt it had taken on. In 2015, in order to settle its debts, Sri Lanka granted China a 99-year lease of the port and a surrounding 15,000 acres of land. Still, in the short term, should Italy formally join China's BRI, businesses in the construction industry could benefit from Italian infrastructure projects implemented as part of the BRI. Law firms with expertise in project finance could also benefit from advising on the financing of BRI projects in Italy. [/QUOTE]
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