Portugal-China relations on the 25th anniversary of Macau’s handover

Jorge Costa Oliveira

The transition of Macau to Chinese sovereignty was a success because both parties worked diligently to achieve it. The Chinese State-Party elite aimed for a “smooth transition” instrumental in persuading Taiwan to engage in negotiations for national reunification under the “one country, two systems” principle. Portuguese political elites also sought a seamless transition, which could serve as a form of redemption for the decolonization processes in Portugal’s former African colonies and East Timor.

Having fulfilled its redemptive role, Macau faded from Portuguese media and the concerns of Portugal’s politicians. Today, it is doubtful whether Portuguese companies see Macau as a gateway to China.

After the handover, China established the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries (Forum Macau), with its Permanent Secretariat based in Macau.

This Forum holds immense potential. However, the results for Portugal have been modest. Chinese MOFCOM officials leading the Forum excel at institutional-level work but lack business-oriented acumen. Portuguese politicians fail to grasp the Forum’s potential and Portuguese business associations are unsure how to leverage its framework to penetrate the Chinese market, starting with the Greater Bay Area.

While China’s rise as an economic and commercial superpower has driven its companies to target larger, higher-income markets, it has consistently sought to deepen relations with Portugal, building on the historical ties centered on Macau. The Portuguese peaceful settlement in Macau is the grounds for a friendly relationship between China and Portugal that lasts almost 500 years. 

Statistics highlight Portugal as a significant destination for Chinese investment stock due to the acquisition of major stakes in large Portuguese companies a decade ago. However, excluding these isolated investments, the presence of Chinese companies in Portugal (and Chinese FDI in Portugal) remains minimal.

Despite the commendable persistence of Portugal’s Foreign Trade & Investment Agency (AICEP) in China, it is unlikely that Portugal will significantly increase its exports of goods or services to China. However, fostering more partnerships between Portuguese and Chinese companies, particularly in third-country geographies (Africa, Latin America), is possible. Moreover, attracting greater Chinese investment to Portugal is feasible. In a context where American “decoupling” and European “de-risking” are gaining traction, Chinese companies and their financiers favor “friendly” markets for Chinese investment.

On the 25th anniversary of Macau’s handover, recent decisions by Portuguese governments —such as the maximalist exclusion of Huawei in 5G networks and the use of non-technical criteria to restrict technology suppliers based on their country of origin in the proposed Cybersecurity Legal Framework — risk ruining Portugal’s multi-secular friendly relationship with China.

Jorge Costa Oliveira, Strategy Analyst & Business Developer