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China Traces A New Line Through Europe

China Traces A New Line Through Europe

Chinese President Xi Jinping will arrive in Rome tomorrow ready to plant a flag in the heart of Europe. Italy is expected to break with most other advanced economies by formally signing onto Beijing's $1.3 trillion global Belt and Road (BRI) infrastructure initiative.


Announced in 2013, BRI aims to boost China's trade and international clout through massive new investments in roads, railways, and ports across the world. Italy's decision to sign on to the initiative – the centerpiece of Beijing's plans to overtake the US as the dominant global economic power of the 21st century – is controversial.

Brussels and Washington don't like it at all, because they fear that if Italy takes loans from China it could end up in a dangerous web of debt that exposes it to pressure from Beijing. After all, Italy is already Europe's second most indebted country, and unlike much smaller economies like Greece, a systemic crisis there could unravel the entire Eurozone.

Within Rome too there is some disagreement: Deputy Prime Minister Luigi Di Maio, of the centrist 5Star Movement, is all for closer relations with Beijing, but the far-right Interior Minister Matteo Salvini is more skeptical.

Still, Chinese cash solves a pressing problem for their populist governing coalition. Clashes with Brussels over budget parameters have forced Messrs. Di Maio and Salvini to backtrack on their campaign promises to cut taxes and boost social spending. Delivering new infrastructure with Chinese money could be a big political winner, especially after a high-profile bridge collapse last year.

More broadly, Europe is already having trouble finding consensus on how to approach China's tech investments, 5G equipment suppliers, and infrastructure investments. The smaller economies of Central and Eastern Europe welcome the cash, while most of the larger economies are concerned about the financial and security implications of Chinese capital. EU members are scheduled to meet on Friday to discuss a common approach to Chinese investment into the bloc. To which we say, in bocca al lupo!

The bottom line: The decision of the bloc's fourth largest economy to embrace Beijing has just opened up a major new fault line within Europe.

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Get insights on the latest news in US politics from Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington:

With the transition of power formally beginning now, what can we expect between now and inauguration day?

Well, there's a couple of important deadlines between now and Inauguration Day. The first is the December 14th meeting of the Electoral College, which will make the state certifications official and will make Joe Biden officially president-elect in the eyes of the US government. Another really important date is going to be January 5th, which is when Georgia has its runoff for the two Senate seats that will determine majority control in the Senate. If the Republicans win one of those seats, they'll maintain their majority, although very slim. If the Democrats win both of the seats, they'll have a 50/50 Senate with Kamala Harris as the tie-breaking vote and slightly more ability to enact Joe Biden's agenda next year. Also, between now and Inauguration Day, we're going to see Joe Biden announce his cabinet and senior staff. Most of whom will probably get confirmed fairly easily early, earlier ... Excuse me, later in January or early in February. And of course, we're going to see what President Trump is going to do next. I think that it's still a little bit up in the air what his post-presidency plans are. He has yet to concede the election. So, anything is possible from him, including a lot of new executive orders that could try to box Biden in and limit his options when it comes to economic policy, foreign policy, and social policy.

What can we expect out of the Biden administration's first 100 days?

Well, the biggest priority of the Biden administration first is going to be to confirm all of their cabinet appointees, and that should be pretty easy at the cabinet head level for the most part, even with a Republican controlled Senate. It's going to be a little more difficult once you get below the cabinet head, because then you're going to start to see some more ideological tests and some more policy concerns be flushed out by Republicans in the Senate. The second thing you're going to see is Biden start to undo as much of the Trump legacy as he can, and his primary vehicle for doing this is going to be executive orders, which is a lot of what president Trump used in order to enact policy. Expect Biden to reenter the Paris Climate Accord on day one and expect him to start undoing things like Trump's immigration orders and perhaps reversing some of his decisions on trade. Yet to be determined is if Congress is going to have fully funded the government for the entire year in December in the lame-duck session, and if they haven't, Biden's going to have to work out a deal probably in March or so to do that.

Joe Biden is well known as the kind of guy who will talk your ear off, whether you're a head of state or an Average Joe on the campaign trail. But Evan Osnos, New Yorker staff writer and author of "Joe Biden: The Life, The Run and What Matters Now," thinks that reputation may be outdated. "Here he is in his eighth decade when a lot of people are, frankly, in more of a broadcasting mode than a listening mode, he's actually become a more attentive listener." Despite one of the longest political careers in modern American history, there remains more to Joe Biden than may meet the eye. Osnos spoke with Ian Bremmer on GZERO World.

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