Relations between China and the Portuguese-speaking countries were marked in 2016 by the 5th Ministerial Conference of Forum Macau, which reinforced the importance of the Special Administrative Region, the Chinese currency and industrial partnerships.
The drop in commodity prices affected the economies of Brazil, Angola and Mozambique and resulted in a reduction of trade of these countries with China, but also a diversification of the relationship, coinciding with the new Chinese central government’s policy on Africa.
In Brazil the crisis meant an opportunity for multiple Chinese investments, like buying a 15% stake of CPFL Energia by the China State Grid Corporation, and in Angola and Mozambique Chinese funding became even more important than it already was.
Xu Yingzhen, the Secretary General of Forum Macau, said that in the last three years the Portuguese-speaking African countries and Timor-Leste (East Timor) received 240 million euros in loans from China with favourable terms, as agreed in 2013 in the 2013-2016 Action Plan, which came out of the 4th Ministerial Conference of the Forum.
The “One Belt, One Road” strategy and strengthening the productive capacity of Portuguese-speaking countries are part of the next action plan of Forum Macau, which came out of the ministerial conference on 11 and 12 October as well as the internationalisation of the renminbi, as a facilitator for investment and trade – for companies – and funding – for the States, which will have a major hub in the Macau financial sector.
At a conference in Lisbon in September, Anselmo Teng, chairman of the Monetary Authority of Macau, who stressed that the MSAR plans to establish a RMB clearing platform between China and Portugal, “which may support the internationalisation procedures” of the Chinese currency and “provide facilities to clear economic and trade transactions in RMB between China and Portuguese-speaking countries.”
Potential development in the cross-border use of RMB between China and Portuguese-speaking countries is very broad, given the current level of trade of more than US$98 billion in 2015, said Teng.
The fifth ministerial meeting of Forum Macau, more than a decade after the institution, was founded is attended by five prime ministers – Portugal, Cabo Verde (Cape Verde), Guinea-Bissau, Mozambique and China – and is already considered the highest level meeting ever.
The Prime Minister of China Li Keqiang announced the allocation of at least 2 billion yuan (US$300 million) in loans with preferential terms to the Portuguese-speaking African and Asian Forum members, in order to promote the productive capacity of beneficiary countries.
Another new feature of the conference was that the headquarters of the US$1 billion fund for investment in Portuguese-speaking countries announced by China in 2013 will be transferred from Beijing to Macau to facilitate contact with potential interested parties.
Writing in Macao magazine, José Luis de Sales Marques, President of the Institute of European Studies of Macau, said the financial infrastructure to support the “One Belt, One Road,” strategy, and the Asian Bank for International Investment and Fund for the Silk Road, can provide technical expertise and opportunities for “solid investments in infrastructure projects in Portuguese-speaking countries (PLP) for private and institutional investors from Macau, and the future Macau Fund.”
The new measures to deepen Macau’s role include its transformation into a China-PLP financial services platform, the creation of the Confederation of China-PLP Entrepreneurs, a base for training Chinese-Portuguese bilingual professionals and the construction of a Services Platform Complex for Commercial China-PLP Cooperation.
During his visit to China, ahead of participation in the Macau Forum Conference, the Prime Minister of Portugal, Antonio Costa, met with the President of China, Xi Jinping, to request more Chinese investment, which has been constant. The most recent example is Fosun’s investment in the largest private bank in Portugal, Banco Comercial Portugues (BCP), where it became a partner of Angolan state oil company Sonangol.
At the same time, the Bank of Portugal is negotiating with the China Minsheng group the sale of Novo Banco, which has important assets in Mozambique and other Portuguese-speaking countries.
2017 was also marked by the launch and completion of various infrastructure projects financed by China in the Portuguese-speaking countries, and the good performance of the smaller, but also more diverse, Portuguese-speaking world economies.
According to the IMF, the Guinean economy will grow 4.8% in 2016, Sao Tome 4%, and Cabo Verde (Cape Verde) 3.6%. Mozambique, in a context of austerity and uncertainty due to the political and security situation, has a growth estimate of 4.5%, Angola is in stagnation and Equatorial Guinea should register a downturn of 9.9%. (macauhub)