Macau, China, 3 Jan – Growing trade and a number of huge deals reveal the increasing importance of China to the economies of Portugal, Angola and Brazil, in the transition to a new year of global economic difficulties.
Going into 2012 the Portuguese-speaking world seems almost immune to adversity with trade between China and the group of eight Portuguese-speaking countries exceeding the target of US$100 billion set for 2013 by China’s Prime Minister, Wen Jiabao during the 3rd ministerial conference of Forum Macau in 2010.
Figures from the Chinese Customs Services published by the Support Office of the Permanent Secretariat of Forum Macau showed that trade between China and the Portuguese-speaking countries totalled US$107.311 billion between January and November of 2011, or 30 percent more than in the same period of 2010.
The year ended with one of the biggest deals ever between China and a Portuguese-speaking country: The China Three Gorges Corporation (CTG) took a stake in Portuguese power company EDP – Energias de Portugal, which involved a significant investment (8.7 billion euros) and showed confidence in the Portuguese economy, which is experiencing a prolonged crisis.
CTG’s plan outlines it will invest jointly with EDP in new projects in the Brazilian market, but without affecting the shareholder structure of EDP Brasil.
BCP shares were boosted by news in the Público newspaper that one of the issues most discussed by the Portuguese and Chinese governments was the possibility of a Chinese bank taking a stake in BCP. The press reported that there was Chinese interest in several companies, particularly power grid company, REN – Redes Energéticas Nacionais.
At the end of the year the China Petroleum & Chemical Corporation (Sinopec) agreed to take a 30 percent stake in the Brazilian subsidiary of Portuguese oil group Galp Energia, Petrogal Brasil. The operation will be carried out via a capital increase of US$4.8 billion.
Although in Portugal’s case the crisis made it urgent to attract investment and funding, China has also emerged as a natural partner for countries that need to sustain the potential growth of the economies, such as Brazil, Angola and Mozambique.
According to economists from the Economist Intelligence Unit (EIU), the latest cooperation agreements signed by Angola and China, signed at the end of May, are evidence of increasing closeness and growing economic interdependence between the two countries, to the point where, “Angola is now China’s main trading partner in Africa.”
China Sonangol was been awarded stakes in four of the 11 pre-salt layer Angolan oil blocks recently licensed for exploration, which in total are expected to require investment of some US$1.32 billion according to the Economist Intelligence Unit (EIU), of The Economist group.
Whilst exploration of the pre-salt layer blocks in Angola is taking its first steps, production of Angolan liquid natural gas (LNG) is due to begin and is attracting interest from international investors and is expected to give the economy new drive.
The visit by China’s vice president, Xi Jinping to Luanda last year was a sign of the growing importance of Angola for China. Xi Jinping visited the Kilamba Kiaxi housing project in Luanda, where Chinese construction group CITIC is building 20,000 apartments.
Another high level visit was that of Mozambique’s President Armando Guebuza to Beijing where he met with his Chinese counterpart Hu Jintao and signed more than ten agreements in the financial, economic, technical and social sectors.
According to researcher Loro Horta, China is rapidly becoming the main foreign power in Mozambique, replacing other traditional political and economic partners based on growing foreign trade, investment and cooperation, “at a time when the West is facing a serious economic crisis.”
“Chinese-Mozambican relations are expected to continue to grow with Beijing becoming the main economic and strategic player in Mozambique and in East Africa,” said Horta in a study published in May.
Amongst other projects in agriculture and industry Mozambique is witnessing the launch of several cement factory projects, including three from Chinese companies, which will make it possible to triple cement production in the country in just two years.
Brazil, which is China’s main trading partner in the Portuguese-speaking world and one of the biggest in the world, continues to be a “magnet” for Chinese investment, specifically in the automotive sector, and there are an increasing number of projects that are bringing companies from both countries together. (macauhub)