In the backdrop of robust advocacy by Portugal leadership, The China-EU Comprehensive Agreement on Investment (CAI) seems to be leap forward catapulting trade and investment between China and European Union to new heights.
Portuguese Prime Minister Antonio Costa has played an anchoring role in convincing European Union to hammer out watershed deal that has innately potential to reshape China-EU ties on commerce, business and investment.
The joint decision of the European block in concluding CAI will help providing relief to COVID-19 pandemic hit economies. The conclusion of the pact (CAI) will bridge the gap for both China and European countries to kick-start new era of investment in post-pandemic COVID-19 economic environment.
Being President of the European Union from January 1st 2021 to June 30 2021, the Portuguese Prime Minister Antonio Costa shrugged off the criticism for keeping at bay to United States of America (USA) in process of concluding and finalizing the China-EU Comprehensive Agreement on Investment (CAI). In broader perspective, the Prime Minister of Portugal Antonio Costa pressed the European Union (EU) to take its own decisions without involving any international player opining that EU’s sovereignty should be upheld by making its own strides with global economies alongside keeping good trade ties with USA.
The CAI will help fast tracking China-EU economic relations by eliminating or reducing red-tape environment for investment between two gigantic trading blocs. The agreement (CAI) will also facilitate in creating jobs and uplifting human development in two sites of the world.
This agreement (CAI) has set the foundation towards cementing the bilateral investment opportunities especially in the post-COVID-19 recovery period for Portugal and China. Chinese have already invested in Portuguese energy, banking, Insurance, Information Technology (IT) health sectors.
Chinese state owned company China Three Georges (CTG) have invested heavily in Energias de Portugal (EDP) main Portuguese energy suppliers.The (CAI) will pave the way for Chinese and Portuguese companies to enhance co-operation in digging opportunities in green energy sector. Portugal is a small country with abundance of solar energy, wind power and geothermal resources as well as untouched marine energy.
Portuguese tourism and its related sector was a power full growth engine of country’s economy by contributing around 10 per cent of Gross Domestic Product (GDP) in pre-pandemic COVID-19 era. The Chinese tourists were main contributors in flourishing Portuguese tourism sector
Portugal is moving forward with good speed in installing 5G in the country. Portugal’s firm stance for pro-Chinese 5G—Huawei– network also helped in shaping EU’s one common position on the 5G network without excluding any company, from any country.
The newly re-elected President of the Portugal Marcelo Rebelo de Sousa is great admirer of China-Portugal historic relationships. Mr. Marcelo on many occasions openly welcomed the 5G spectrum in the country.
Huawei, the Chinese Information Technology (IT) giant have singed Memorandum of Understanding (MoU) with Altice Portugal for development and implementation of 5G services in Portugal. While Vodafone Portugal has already installed it’s first 5G antenna in Lisbon which is available for companies, universities and start-ups to test their projects
China-EU Comprehensive Agreement (CAI) also pave the road for investment in Informational Technology (IT) and Research and Development (R&D). Portugal being permanent host of considerably world’s largest tech gathering event “Web Summit” can also convince the Chinese tech companies to open their European regional offices in Portugal. The recent example set by the leading car manufacturers Mercedes-Benz and Volkswagen by opening software development centers in Lisbon, Portugal.
China-based conglomerate Fosun, has heavily invested in Portugal by taking over Portuguese largest insurance company Fidelidade as well as a main shareholder in Portuguese bank Millenium BCP. Fosun group considered Portugal as a “gateway for European investment”.
The CAI will carpet the road for more Chinese based investment companies like Fosun to establish joint ventures with Portuguese companies in financial and private healthcare sector. Portugal has the infrastructure and potential of becoming the medical tourism hub in Europe by creating international healthcare insurance system with its Chinese partners following the leading example of South Korean medical tourism.
New dawn of Post-pandemic COVID-19 era will bring fresh breath to home-sick tourists around the world. While Portugal have ability to attract good number of home stranded Chinese tourists by promoting its bannered campaign “VisitPortugal” in China through its tour operating partners by arranging direct flights from China to Portugal.
Portuguese tourism and its related sector was a power full growth engine of country’s economy by contributing around 10 per cent of Gross Domestic Product (GDP) in pre-pandemic COVID-19 era. The Chinese tourists were main contributors in flourishing Portuguese tourism sector.
The accord (CAI) between China and European Union will ease the entry of Chinese digital financial service providers in the European block. Portugal can take advantage by introducing digital payment system collaborating with Chinese and Portuguese banks or digital financial service providers which help Chines tourists to pay in unionpay, WeChatpay and Alipay.
In the wake of Covid-19 pandemic, which jolted the world’s super economies, china firmly supported the small economies by providing swift assistance of personal protection equipment and medical devices.
Chinese government has also shown solidarity with Portugal by providing tons of personal protection kits and medical devices in the time of crisis. It shows the strong relationships both countries enjoy from centuries.
Muhammad Faisal is a senior journalist working for Portugal mainstream media houses. With special interest on China-Portugal and China-EU trade ties, he writes opinion pieces on economy, diplomacy and international relations.