FROM EIR DAILY ALERT

Italian Minister Geraci Encourages China To Build Infrastructure in the United States

Jan. 25, 2019 (EIRNS)—In an interview with Class-NCBC TV on Jan. 23, Italian Undersecretary of State for Economic Development Michele Geraci promoted the same proposal as that made by the Schiller Institute, that a solution for U.S.-China trade imbalances could be Chinese investments in U.S. infrastructure. Geraci also explained, in an excellent way, why Italy seeks cooperation with China to develop Africa.

Asked about the positive turn in the U.S.-Chinese trade dispute, Geraci said:

“Tariffs have always been used as a tactical tool in order to put some negotiating chips on the table, but I never believed that either the U.S.A., China, or even Europe could use tariffs in a permanent way, to go back to autarky, as in the past. Therefore, the latest news is welcome and, let’s remember, this comes after the ‘moratorium’ on tariffs [announced] at the beginning of the year. Thus, slowly, rationality prevails and confirms that it is more a question of temporary tactics, in order to achieve some concessions from one’s trade partner.”

Geraci then expressed his wish that other countries follow the same path of “reducing abnormal trade surpluses,” clearly referring to Germany. What is key, he said, is the will to rebalance the bilateral balance of trade. It can be done in different ways:

“There could be agreements—I am thinking of the production of U.S. aircraft which China needs for its increased commercial air traffic. This could be a first step that certainly won’t reduce the deficit by $300 billion, but look: There is another side to the trade balance, which is not the current account balance but the capital account. This means that there could be Chinese investments in the United States, for instance, in infrastructure. The Chinese showed that they are very good at this and the U.S. needs it. That is a capital flow too, which could go from the East to the West, and if you put together trade account and capital account, this can move towards parity as a target. However, a reduction of the trade deficit would be an excellent signal for everyone, for the U.S. and for China as well, because ultimately, China needs things that the U.S. produces.”

On Africa, Geraci stressed that “the real way to solve the migration problem is to create conditions for Africa to have a sustainable economic and social development.” The real problem is not “the few thousands” of migrants now, but “the 20 million youth” of tomorrow who can’t find jobs in Africa. “Therefore, what is important is an effort to develop a solid economy in Africa.” He optimistically stated that,

“I have said this in the past: Italy can and must play a major role so that our position in the Mediterranean, which has created some problems [with migration flows], is used as a bridge for the whole of Europe and for countries such as China, as a hub to go and invest in Africa.”