Portugal Balances EU ‘De-risking’ Strategy With Stronger China Ties – Report

 by: Jessica Ferreira

The European Union’s “de-risking” strategy towards China is far from being a topic of political debate in Portugal, as the country continues to develop its bilateral partnership with Beijing, according to a report by the European Think-tank Network on China (ETNC).

According to the report, the Portuguese position on “de-risking” is based on a balance between alignment with the general lines of European strategy, on the one hand, and keeping the door open to foreign direct investment (FDI) and trade with China, on the other.

Despite the political alignment with the EU’s harder line on China, there are signs that Chinese investors are paying attention to Portugal as a recipient of greenfield investments and that China continues to be highly valued as a market and as a source of investment in Portugal.

China Tops Planned Investments in Portugal Thanks to CALB

This interest has been particularly reflected in the battery factory for electric vehicles that the Chinese state-owned company China Aviation Lithium Battery (CALB) Technology plans to set up in Sines, in partnership with Xpeng (a Chinese producer of electric cars) and Volkswagen, which represents an investment of more than EUR 2 billion.

In addition, Luso-Chinese ties were marked by the official visit of China’s vice-president, Han Zheng, to Portugal in May 2023, his first visit to an EU member state, during which both countries reiterated their promises to strengthen bilateral cooperation in a wide range of areas and deepen the centuries-old friendship between the two.

Furthermore, the report states that, in the long term, the greater or lesser attention paid to de-risking at a political level will be strongly dependent on the impacts on the real economy and employment that result from the eventual implementation of the principles underlying the EU strategy.

Huawei Ban From Portugal´s 5G “an Exclusively Technical Decision”

However, it was also highlighted that relations between the two countries were shaken in 2023, with Portugal banning Chinese operators and suppliers, such as Huawei, from using its equipment on its 5G networks, due to security risks and concerns associated with the use of the company’s equipment on the networks.

The “de-risking” of relations with China has become an organizing principle for the European Union (EU) since it was first presented by the President of the European Commission, Ursula von der Leyen, in March 2023.

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