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Chinese economic diplomacy regarding Portugal: promoting business or concealing geopolitical ambitions?


The main purpose of this paper is to explore the objectives and possible consequences of the Chinese investments in Portugal in the last decade. Are they business as usual in a globalized economy, or something else inside a broad political strategy? Trying to answer this question, the approach will be made both through the lens economic diplomacy and the geopolitical analysis. The research will be developed throughout several points: firstly, the Chinese model of socialist market economy within a global environment configured by liberal ideas; secondly, the main characteristics of China’s economic diplomacy model, one where the economic and the political are closely intertwined; thirdly, a focus on the economic attractiveness that China exerts upon Portugal, having the investment in the Portuguese energy sector as a case in point; and finally, some conclusions about the possible consequences for Portugal economic and strategic dependence on China in a world where the USA–China rivalry is growing.

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  1. 1.

    In this regard, we follow the characterization of mercantilism by Fernandes (2013a, b) in Elementos de Economia Política Internacional, pp. 40ff.

  2. 2.

    See English translation of the 1982 Constitution of China in State Council/The People’s Republic of China, Constitution of the People’s Republic of China (full text after amendment on March 14, 2004), available at [accessed on 7/5/2019].

  3. 3.

    See Article 15º: “The State practices socialist market economy. The State strengthens economic legislation, improves macro-regulation and control. The State prohibits in accordance with law any organization or individual from disturbing the socio-economic order”; and Article 16º: “State-owned enterprises have decision-making power with regard to their operation within the limits prescribed by law. State-owned enterprises practice democratic management through congresses of workers and staff and in other ways in accordance with law.”

  4. 4.

    The mission of the CPC is presented officially (in English) in the following manner: “The Communist Party of China is the vanguard of the Chinese working class, the Chinese people, and the Chinese nation. It is the leadership core for the cause of socialism with Chinese characteristics and represents the developmental demands of China’s advanced productive forces, the orientation for China’s advanced culture, and the fundamental interests of the greatest possible majority of the Chinese people. The Party’s highest ideal and ultimate goal is the realization of communism. The Communist Party of China uses Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of Three Represents, the Scientific Outlook on Development, and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guides to action.” See Constitution of the Communist Party of China, revised and adopted at the 19th National Congress of the Communist Party of China on October 24, 2017, available at [accessed on 7/05/2019].

  5. 5.

    “The differences in perceiving the role of economy and diplomacy in these discussions are in line with the two types of economic diplomacy defined by Yi Lu, a professor of China Foreign Affairs University. In his view, the first type is to use economic means to reach specific political objectives or diplomatic strategic intentions; the second is to focus on economic relations in the state’s external relations. […] In other words, economic diplomacy is not only aimed at promoting national economic interests, but also intended for political objectives and diplomatic strategy. In the case of China, its rising economic power helps increase the influence of its economic diplomacy and allows it to take maneuvers against the EU policies which are in conflict with its national interests.” (Men 2013, p. 298).

  6. 6.

    See “The Nobel Prize 2010—Liu Xiaobo,” in The Nobel Foundation, available at [accessed on 16/05/2019].

  7. 7.

    See Asian Infrastructure Investment Bank (AIIB), “Who are We,” available at [accessed on 20/05/2019].

  8. 8.

    See Asian Infrastructure Investment Bank (AIIB), “Members and Prospective Members of the Bank,” available at [accessed on 20/05/2019].

  9. 9.

    The chapter about Portugal is part of a study about the Chinese Investment in Europe by the French Institute of International Relations (IFRI), the Elcano Royal Institute and the Mercator Institute for China Studies.

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    See IMF Lending Case Study: Portugal, available at [accessed on 28/11/2019].

  11. 11.

    See Global Media, Quem Somos? available at [accessed on 28/11/2019].

  12. 12.

    “China Three Gorges (Europe), S.A. is fully owned by China Three Gorges (Hong Kong) Co. Ltd, which is fully owned by China Three Gorges International Corporation. China Three Gorges Corporation holds 100% equity of China Three Gorges International Corporation, and is in turn fully owned by People Republic of China. According to paragraph 1(b) of article 20 of the Portuguese Securities Code, which dictates the aggregation of China Three Gorges and CNIC Co., Ltd.'s shares, a total of 28.25% of voting rights are attributable to People's Republic of China.

    Orise, S.a.r.l. is fully owned by Kindbright Holdings Corp. Limited, which in turn is fully owned by CNIC Co., Ltd. (formerly designated Guoxin International Investment Co., Ltd), which in turn is fully owned by People's Republic of China.” See EDP, informação para investidores/Titulares de Participações Qualificadas e Direitos de Voto, available at [accessed on 7/05/2019].

  13. 13.

    See REN, Investidores/Estrutura Accionista, available at [accessed on 7/05/2019].

  14. 14.

    The profile of this Chinese State-owned company is described on its Web site as following: “As a State-owned company established on December 29, 2002, State Grid takes the investment, construction and operation of power grids as core business. We are committed to reelectrification and energy connectivity, meeting the power demand with clean and green alternatives. State Grid supplies power to over 1.1 billion population in 26 provinces, autonomous regions and municipalities, covering 88% of Chinese national territory.

    As the largest public utility in the world, with a registered capital of 829.5 billion RMB and assets of 3808.83 billion RMB, State Grid also owns and operates overseas assets in the Philippines, Brazil, Portugal, Australia, Italy and Greece etc.” See State Grid Corporation of China, Corporate profile, available at [accessed on 7/05/2019].

  15. 15.

    See José Pedro Teixeira Fernandes “O erro estratégico da venda da EDP ao Estado chinês” in Público, 13/05/2018, available at [accessed on 6/05/2019].

  16. 16.

    The situation is all the more odd if we consider the decree-law 138/2014 (see Diário da República Electrónico from 15/09/2014, This legislation established a safeguard regime for essential strategic assets and for protecting the supply of services essential for the national energy, such as energy, as indicated in Article 3, number 1. This allows the government to oppose an “operation that results, directly or indirectly, in the acquisition of control, directly or indirectly, by person or persons of non-European Union countries […] of strategic assets, regardless of the judicial form.” Article 3, number 3, paragraph a), also prevents such alienation if there are “connections between the buyer and third countries who do not recognise or respect the fundamental principles of a State of democratic rule of law.”

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    See European Commission, Screening of foreign direct investment, 10/04/2019. Available at [accessed on 28/11/2019].

  18. 18.

    According to Teixeira (2019), this may be the global context: “The new world order will not be easy for Europe and very likely Europeans will be among the victims of this rivalry. Americans and Chinese will pressure the EU to choose. Precisely the choice Europeans don’t want to make. Because they have economic interests on both sides and a choice always implies losing something. But at this point, it is worth noting the choice goes far beyond economics. It is political. Because this is rivalry for global hegemony, and after trade, technology and the ‘silk road’ there will be the construction of a political alternative. Between a single party system and digital control of the masses and another system that, with more or less threats to a State of law, will always be a Democracy.”


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Correspondence to José Pedro Teixeira Fernandes.

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Appendix 1

See Table 1.

Table 1 Chinese direct investment transactions in Portugal (2000–2016).

Appendix 2

See Fig. 1.

Fig. 1

Source: Casaburi/ESADE (2018)

European countries with highest level of Chinese investment (in relation to the size of their economies, 2015).

Appendix 3

See Table 2.

Table 2 The 10 largest investments by Chinese firms in Portugal (2010–2016).

Appendix 4

See Fig. 2.

Fig. 2

Source: Rhodium Group and the Mercator Institute for China Studies (2019)

Chinese FDI transactions in the EU by country (2000–2018).

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Fernandes, J.P.T. Chinese economic diplomacy regarding Portugal: promoting business or concealing geopolitical ambitions?. Int Polit 58, 18–36 (2021).

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  • China
  • Portugal
  • Economic diplomacy
  • Globalization
  • Foreign direct investment
  • Geopolitics