Presence of Portuguese companies in Africa attracts Chinese companies to privatisations

A presence in Africa is one of the main factors that has attracted Chinese investors to the privatisations of Portuguese companies in recent years, and investment is expected to continue, according to journalists Anabela Campos and Isabel Vicente.

This summary of privatisations, especially during the bailout period that Portugal was subject to between 2011 and 2014 and included some of the largest companies in the country, such as Energias de Portugal (EDP), is included in the book “Negócios da China,” recently published by the two journalists in Lisbon.

Speaking to Macauhub, Anabela Campos, a reporter for Portuguese weekly newspaper Expresso, said that Angola and Mozambique were especially interesting markets for Chinese investors and are among the “reasons why they were interested in Portugal.”

“The importance of deepening their presence in Africa, with companies that know the market well, had a great power of attraction for Chinese investors. The fact that there are good companies for sale, the sale prices in some cases, and that China is internationalising its economy did the rest,” she said.

A 2015 study by the Rhodium consultancy, drawn up by law firm Baker & McKenzie, who analysed total transactions between 2004 and 2014 puts Portugal as the fourth country in Europe to attract most Chinese investment in the last decade, ahead of much larger economies such as in Spain or Italy, for example.

In 2014, it said, total investment by China in Europe amounted to US$18 billion, double the amount in the previous year, with the preferred countries of Chinese investors being the United Kingdom (US$5.1 billion), Italy (US$3.5 billion), the Netherlands (US$2.3 billion) and Portugal (US$2 billion), followed by Germany (US$1.6 billion).

The amount could even have overtaken the country that received most investment if the offer by Anbang for Novo Banco (4.2 billion euros) had been approved by the Bank of Portugal.

These figures are from before investments made later, including in the health sector, by HNA in airline TAP and by Fosun, completed in recent weeks, in Banco Comercial Portugues (BCP), the largest Portuguese private bank, which made the Chinese group the largest shareholder, overtaking Angolan oil company Sonangol.

The journalists observe a pattern between Chinese and Angolan investment in Portugal, as it is present virtually in the same sectors and in some cases the same companies – such as BCP, and also in Global Media.

“It’s too early to say that there is some coordination between them, particularly in BCP, where Sonangol is, which owns subsidiaries involved in deals with the Chinese,” said Campos.

The journalist also said that Chinese investors, “are in Portugal in a different way to any country in the West, not only because of the diversity of sectors in which they have entered, but also the fact that two Chinese state-owned enterprises now have control of the Portuguese electricity sector, in EDP ​​and power grid company REN.”

Information gathered by the journalists while researching the book showed that state-owned China Petroleum & Chemical Corporation (Sinopec) is likely to become a shareholder of Galp Energia, with which it is a business partner in Brazil.

As a result of research and interviews of some of the key politicians and managers of the country, the book by the Expresso journalists also addresses investment from other sources, including Angola and France, which they consider “an economic revolution” in Portugal. (macauhub)