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Current Affairs 25 March 2019 Digest 1: Italy joins China’s Economic Silk Road project, Oman allows US military to use its ports

Italy has signed a non-binding protocol with China to take part in the nation’s Belt and Road Initiative, which aims to link China with Europe. With the move, Italy has become the first country to sign up for the massive project.

Mar 25, 2019 11:34 IST
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Story 1 -Italy, China sign new 'Silk Road' protocol

Italy on March 23, 2019 signed a "non-binding” protocol with China to take part in the nation’s Belt and Road Initiative (BRI), which aims to link China with Europe.

With the move, Italy has become the first G-7 country to sign up for the massive project, which is seen as a new Silk Road that will have trade links stretching from Asia to Europe.  In doing so, Italy has sparked unease in the United States and its European Allies, who have previously expressed concern over China's growing global influence.

Note

The agreement was signed during Chinese President Xi Jinping’s visit to Rome, Italy’s capital. It was signed by Italy’s Deputy Prime Minister Luigi Di Maio and Chairman of China’s National Development Commission, He Lifeng.

Overall, 29 deals amounting to 2.8bn were signed during Chinese President Xi Jinping's visit to Italy. It was agreed that while big Italian gas, energy and engineering firms will be offered entry into the Chinese market, China's Communications and Construction Company will be given access to the port of Trieste to enable links to Central and Eastern Europe. China will also be involved in developing the port of Genoa.

Economic Silk Road: Everything you need to know!

The Belt and Road Initiative (BRI) or the Silk Road Economic Belt and the 21st-century Maritime Silk Road is a development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organisations in Europe, Asia, Middle East, Latin America and Africa.

The initiative was unveiled by Chinese President Xi Jinping in September and October 2013 during visits to Kazakhstan and Indonesia.

The "Belt" refers to the overland routes for road and rail transportation called the Silk Road Economic Belt, whereas road refers to the sea route corridors or the 21st Century Maritime Silk Road. The Maritime Silk Road initiative was first proposed by Xi Jinping during a speech to the Indonesian Parliament in October 2013.

Until 2016 the initiative was officially known as One Belt and One Road initiative but the official name was changed as China felt that the emphasis on the word "one" will be prone to misinterpretation.

According to China, the initiative is a bid to enhance regional connectivity and embrace a brighter future, while critics of the initiative see it as a push for Chinese dominance in global affairs with a China-centered trading network.

Besides this, the levels of debt owed by African and South Asian nations to China have raised concerns in the West.

How would it benefit Italy?

Despite being one of the world's top 10 largest economies, Italy slipped into recession at the end of 2018 and its national debt levels have been among the highest in the eurozone.

In the midst of this, the new deal with China will open the prospect of new projects for Italian firms, it will also open up the Chinese market for Italian oranges as well as pave way for a partnership between Chinese tourism giant Ctrip with Italian airports.

The deal also promises to enhance the cultural tie-ups between the two nations with China pushing to have several Serie A football matches played in China.

Background

According to critics, China’s ambitious new economic Silk Road is predatory and it overwhelmingly favours China and Chinese companies.

In a show of dissent, Italy’s other Deputy Prime Minister, Matteo Salvini, who heads the right-wing League, was conspicuously absent from all official ceremonies during Chinese President Xi’s visit.

Salvini has notably urged caution about using Chinese telecom giant Huawei's next-generation 5G mobile technology.

In fact, the United States has warned its European allies that Huawei could use its 5G technology as a backdoor for spying, a claim that China has strongly rejected.

Story 2- Oman signs deal to allow US military to use its ports

Oman on March 24, 2019 signed an agreement with the United States, allowing American ships and warplanes to take advantage of its ports and airports.

The framework agreement is aimed at bolstering Oman-US military relations. It was signed between the defence ministries of both the nations.

Key Highlights

The agreement will allow the US forces to take advantage of the facilities offered at some of Oman’s ports and airports during visits of the US military vessels and aircraft, particularly in the port of Duqm.

The Duqm port is located in southern Oman on the Arabian Sea and around 500 kilometres from the Strait of Hormuz.

The Strait of Hormuz is crucial to global energy supplies, with about a third of the world's seaborne oil passing through it every day.

The narrow waterway is also an international transit route through which American forces routinely pass. It has, in fact, witnessed tense encounters between the American and Iranian forces in the past.

Background

The United States has a number of military bases across the Gulf with the largest in Qatar with about 10,000 troops.

Shiite Iran has repeatedly threatened to block the strait due to tensions with Sunni-ruled Gulf nations, including its main regional rival Saudi Arabia.

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