Since joining the European Union in the 1980s, Portugal has consistently promoted outward investment and attracted foreign capital to drive national economic development. In recent years, Portugal's efforts to attract foreign investment have intensified. In addition to capital from EU member states such as the UK, Germany, France, the Netherlands, and Spain, as well as the United States, Chinese investors have successively entered Portugal, with sectors involved including energy, telecommunications, finance, insurance, and water utilities. According to British media reports, Portugal's investment received from Chinese enterprises in recent years is second only to the UK, Germany, and France among EU member states. Immigrating to Portugal is gradually becoming a preferred choice for Chinese investors.
According to the report: "Chinese investors are increasingly directing capital toward economies severely affected by the financial crisis (and) seizing opportunities brought about by the privatization of public utilities and transportation infrastructure." In Portugal, China Three Gorges Corporation invested 2.7 billion euros to acquire a 21% stake in Energias de Portugal (EDP), and the State Grid Corporation of China spent 1.4 billion euros to acquire a 25% stake in Redes Energéticas Nacionais (REN). Both buyers are Chinese state-owned enterprises; however, last year, the private conglomerate Fosun International purchased an 80% stake in the state-owned Caixa Geral de Depósitos insurance arm—Portugal's largest insurance group—for 1 billion euros, and subsequently used the latter to acquire the hospital operator Espírito Santo Saúde for 460.5 million euros.
In other areas, Huawei invested 10 million euros in a technology center, and Beijing Enterprises Water Group acquired Veolia Water. Although there is almost no investment in greenfield projects, acquisitions often mark the beginning, not the end.
José Brandão de Brito, Chief Economist at Banco Comercial Português, stated: "In a country mired in crisis, the important thing is to transfer capital from weak hands—owners with solvency and debt problems—to strong hands with the ability to invest and open up markets. The Chinese are in a very favorable position to do so."
As part of the 2011 deal, China Three Gorges Corporation pledged to invest 2 billion euros in renewable energy enterprises led by EDP. In June, they inaugurated the newly established Hydro Global investment company, targeting South America and Africa. State Grid joined forces with REN to create similar enterprises in Angola and Mozambique (and helped them obtain 1 billion euros in funding from the China Development Bank in 2013). Fidelidade continues to advance into Africa, establishing a presence in Mozambique.
According to the report, Beatriz Araújo, a partner in charge of M&A at the law firm Baker McKenzie, said: "They are already demonstrating a model for developing these companies. Therefore, those investments are the beginning of development."
According to Pedro Ortigão Correia, Executive Director of AICEP Portugal Global, these investments not only prove the quality of our assets but also the closeness of the relationship. At a recent conference in Lisbon, he also stated that Portugal provides a platform for Portuguese-speaking countries and 250 million consumers.
According to the report, it is likely that there will be more diversified investments. João Marques da Cruz, President of the Portugal-China Chamber of Commerce and Industry, said: "Sectors such as tourism, food processing, and ports have huge potential."
In addition, bilateral trade volume has tripled in 6 years. Speaking about Portuguese exports, Correia said: "There are not only automobiles and minerals, but also food and footwear. China's huge middle class is paying more attention to consumption."
According to Xu Weili, Economic and Commercial Counselor at the Chinese Embassy in Lisbon, the total trade volume last year was 4.8 billion US dollars, an increase of 23% compared to 2013. He said: "There are more and more companies working hand in hand," and he promised to "support all plans to deepen the relationship."
According to the report, Portugal recently revised its "Golden Visa" program—the Residence Permit for Investment Activity—to promote urban renewal, much of which is related to the tourism industry. One can apply for a residence permit by investing 350,000 euros in this area, or 500,000 euros if purchasing real estate. The Golden Visa has already been warmly welcomed by Chinese citizens; by the end of October, out of 2,621 Golden Visas issued, 2,087 were issued to Chinese nationals.
In 3 years, the program has attracted nearly 1.6 billion euros, almost all in real estate. Although the program was briefly suspended this year, real estate agents say demand is strong. Shen Hao, CEO of Nobel Prestige, which has offices in Lisbon, Rome, Barcelona, and Athens, said: "Chinese investors have money and experience. Many have a clear view of Southern Europe: the potential is huge."
According to the report, given China's importance, some have concerns about the impact of a sharp slowdown in the Chinese economy. There are also some who dismiss these concerns, believing that the current Chinese economy is significantly internationalized, the central bank's foreign exchange reserves are huge, and according to the World Bank, China is still expected to achieve economic growth rates of 6.9% and 6.7% this year and next, respectively. Da Cruz said: "How can there be talk of a hard landing and a soft landing? There is no landing at all."