Thu, Dec 06, 2018 - Page 6 News List

Xi arrives in Portugal to boost European trade ties

CONTENTIOUS:China owns a 28 percent stake in EDP, the Portuguese energy utility, and stakes in its biggest bank, BCP, and its leading insurance firm, Fidelidade

AFP, LISBON

Chinese President Xi Jinping, center right, lays a wreath at the tomb of Portuguese poet Luis Vaz de Camoes at Lisbon’s Jeronimos Monastery on Tuesday.

Photo: AP

Chinese President Xi Jinping (習近平) arrived in Portugal on Tuesday for a two-day visit to boost economic ties, despite concern in some EU capitals over China’s growing influence across the continent.

“Relations between China and Portugal are entering their best period... We must develop existing projects and step up our commercial exchanges,” Xi said at a meeting with Portuguese President Marcelo Rebelo de Sousa.

Xi’s two-day stay would include the signing of cooperation agreements, one of which is to bring the southwestern port of Sines into Beijing’s Belt and Road Initiative.

“Portugal is an important hub in the land and maritime silk routes,” Xi said, while De Sousa added that Sines was “the symbol of a partnership we want to continue to build.”

Andre Verissimo, editor of the leading business newspaper Jornal de Negocios, said: “If Portugal joins the initiative, it will become the first country in western Europe to do so.”

Portugal, one of western Europe’s poorest countries, opened to Chinese investment after being hit hard by the 2008 global financial crisis.

Investment from China accounted for 3.6 percent of Portugal’s GDP from 2010 to 2016, according to figures from Spain’s ESADE business school.

However, China’s growing influence in Europe, welcomed by Greece and some east European countries, is viewed warily by others on the continent.

At the initiative of France and Germany, EU countries last week agreed on a framework regulating foreign investment, particularly from China.

Portuguese Prime Minister Antonio Costa said that Lisbon did not back the idea and was relieved that the final accord provided for only an advisory role for the European Commission.

“In Portugal, we are not anxious about the origin of foreign investment,” Costa said, asking Europe to eschew “the path of protectionism.”

China owns a 28 percent stake in Portuguese energy utility EDP, the country’s largest firm, via China Three Gorges and China’s state-owned international investment company CNIC.

It has a stake in Portugal’s biggest private bank, BCP, and its leading insurance company, Fidelidade. According to estimates, Chinese investment in the country could total US$12 billion dollars.

Perhaps the most contentious issue is China Three Gorges’ bid to take a controlling stake in EDP, of which it is already the main stakeholder. The operation, launched in May, involves about 9 billion euros (US$10.21 billion).

However, while it has been welcomed by the Portuguese government it still risks running afoul of barriers imposed by regulators in about 15 countries where EDP operates — including the US.

China has risen to Portugal’s 11th-largest trade partner in the decade since 2008, when it was 28th on the list.

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