Chinese industries set up production bases in Portugal
The focus on Chinese investment in Portugal has settled on large privatizations and real estate acquisitions, but industrial companies have also chosen Portugal as a location for their production bases.
One of the latest investments, of 13 million euros, was in the construction of a new industrial unit in Aveiro by 360 Steel Materials, a partnership between Portugal’s Metal Rolo and Chinese steel maker Zhejiang Huadong.
Other examples are the investment from Zhejiang Singbee Lighting Technology, in a LED light bulb factory, in the Greater Porto area and the acquisition, in 2013, of 35 percent of Portuguese marble company EDC Mármores (marble). Almost all of the company’s production will be exported to China following an investment of approximately 24 million euros.
Another recently announced investment by Xionghong, will be processing cotton imported from the US/Brazil at a factory in northern Portugal. Once processed the cotton will then be re-exported to China.
These recent investments in processing and finishing projects in Portugal are focused on gaining access to the European market, as well as to providing a link to the USA and to Brazil.
The Chinese Ambassador to Portugal, Huang Songfu, recently mentioned that relations between the two countries had reached a “new high” and gave the example of an investment by Zhejiang Huadong as well as by Wuhan Zhongye (mold making company), expected to total around 30 million euros.
After setting up a strategic partnership between the two countries, China launched a wave of significant investments in Portugal involving large public companies.
These investments were significant to the Portuguese economy and included the privatization of Power Company Energias de Portugal (EDP) awarded to China Three Gorges and, more recently the acquisition of the insurance company Caixa Seguros by Fosun International.
Chinese investment in these privatizations totaled 8 billion euros.
Alongside this Chinese private investors have channeled hundreds of millions of euros to gain access to “golden visas”. This scheme provides residence visas that can be used in all Schengen area countries to investors who spend over 500,000 euros in property.
Official figures show that Chinese citizens will carry out around 80 percent of the investment through this program, which is expected to be in excess of 1 billion euros this year.