China courts Portugal as EU welcome wanes

China's President Xi Jinping began a three-day visit to Spain on Tuesday and will stop in Portugal on December 4-5 on his way home.

China is looking to strengthen ties within Europe as the trade war with the US looks set to continue. 

Many EU member states are seeking to restrict Chinese investments, especially those in key infrastructure companies which, too late, are now being viewed as strategically important and should be controlled by nation states or national companies. There also is concern that the Chinese, by buying into European companies, are able to analyse and replicate sensitive technology.

"It's a political manoeuvre to maintain ties at a complicated time for China," Angel Sanchez, the director of the Centre for Global Economy and Geopolitics at Spain's ESADE Business School, told Agence France-Presse.

As the US warns of tariffs on $267 billion of Chinese imports, adding to the punitive tariffs already in place for $250 billion of imports, further threats from President Trump include tariffs on European goods.

China has been welcomed by Spain and Portugal in the past, with the Chinese government’s companies buying significant stakes in EDP and electricity distribution company, REN. A full bid for control of EDP by China Three Bridges is being looked at by the EDP board.

The mood from Beijing when looking at increasing investment in the UK has been tempered by Brexit with China now keen to develop ties with individual EU member countries rather than battle with a negative mood in Brussels which, led by Germany and France, has turned decidedly anti-Chinese.

Portugal’s hearty welcome to Chinese investment came at a time when few would risk their money in a country that had found it necessary to ask for, and receive, a bail-out. 

Whether Beijing successfully can continue to pick off countries one by one depends in how Brussels reacts to continued Chinese dominance of key industries.

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