Trade winds carry ties forward

PUBLISHED : Sunday, 10 June, 2007, 12:00am
UPDATED : Sunday, 10 June, 2007, 12:00am

Portugal and China re-established diplomatic relations 25 years ago and ties between the two countries have never been as close as they are today.

As a clear indication of the importance that Portugal is placing on developing its relationship with the world's fastest-growing economy, the country opened its first consulate in the mainland last year.

'We opened a consulate in Shanghai in 2006, which means that we want to expand our political and commercial relationship from Macau and Beijing to Shanghai,' said Pedro Moitinho de Almeida, Consul-General of Portugal in Macau and Hong Kong. Consular affairs for northern China were formerly handled through the Portuguese Embassy in Beijing.

According to the National Institute of Statistics of Portugal, the country's most important export to the mainland and Hong Kong last year was integrated circuits. Its most important export to Taiwan was particle boards. Not surprising to anyone who has dined at one of Macau's many Portuguese eateries, wine was the most important export to the former Portuguese enclave, accounting for nearly two thirds of the wine consumed there last year.

Portugal's most important imports from the mainland were rosin and resin acids, flat-rolled products of iron or non-alloy steel, automatic data processing machines, telephone sets and electric instant water heaters.

Wristwatches and telephone sets were its most important imports from Hong Kong. Automatic data processing machines were its most important import from Taiwan.

Greater China enjoys a significant trade surplus with Portugal, with Portuguese imports valued at Euro916.50 million (HK$9.63 billion) last year. Exports were valued at Euro331.9 million for the same period. The mainland accounted for 64 per cent of Portugal's Greater China exports and 85 per cent of its imports. Hong Kong accounted for 28 per cent of its exports and 3 per cent of its imports. Taiwan accounted for 4 per cent of its exports and 12 per cent of its imports. Macau's imports from Portugal accounted for 4 per cent of last year's total for Greater China and its exports for less than 0.1 per cent.

'The volume of trade between Portugal and China has gone up substantially over the past three years,' Mr Moitinho de Almeida said.

'China is the factory of the world, producing everything and exporting it at very attractive prices. But Portugal's exports to China are also on the increase, and the trade imbalance decreased last year.'

In his 2002 policy address, Macau Chief Executive Edmond Ho Hau-wah put forward the idea of turning Macau into a platform that could facilitate trade between Greater China and the Portuguese-speaking countries of Angola, Brazil, Cape Verde, East Timor, Guinea-Bissau, Mozambique and S?o Tome and Principe. A ministerial meeting was held the following year, and the move has since borne fruit.

'The trade figures [between China and its Portuguese-speaking trade partners] have tripled since the [first] Macau Forum was held [in 2003],' Mr Moitinho de Almeida said. 'Angola is now China's biggest trading partner in Africa - largely because of its oil. So, the forum has given concrete results.'

While Macau accounts for only a fraction of the trade volume between Portugal and Greater China, it continues to attract the lion's share of Portuguese investment, especially in such areas as banking, communications, engineering, law, power and transport. More than 60 per cent of the Portuguese companies operating in China are based in the former Portuguese territory. Beijing is second in line with six, Shanghai follows with five, Guangzhou has four, Shandong three, Zhuhai two, and Hong Kong one.

Macau is attractive to companies and entrepreneurs from Portuguese-speaking nations because the Portuguese language continues to enjoy official status in the enclave, so communication is easier. The presence of Portuguese banks and a familiar legal system are additional draws.

Manuel Geraldes, trade commissioner for Macau and Hong Kong, said: 'Since 2003, we have seen an increasing number of Portuguese companies entering the market in Macau. We have also been seeing more entrepreneurs coming in and setting up businesses as well as companies using Macau as a doorway through which to enter the China market.'

Portugal is one of 38 countries to have signed an official air service agreement with Macau International Airport, but direct air links - which were launched shortly after the airport opened in 1995 - were scrapped before the change of administration in 1999. There are hopes of a resumption of direct flights as a result of the growing number of budget carriers flying into and out of the enclave.

'It would be good for the flow of tourism [between Portugal and China] to have a route linking Lisbon and Macau,' Mr Geraldes said. 'Many people from the mainland would be able to take advantage of these flights to visit Europe. After they get a taste of Portuguese culture in Macau, they might want to visit Portugal. More tourists from Guangdong could use this flight.'

Viva Macau, which will launch flights linking Sydney, Australia with the former Portuguese enclave three times a week next month, plans to initiate flights to Europe by the end of the year.

Moscow and Milan are rumoured to be the airline's first choices, but there are hopes among Macau's Portuguese community that Lisbon could eventually form part of the start-up's continental network, linking the Portuguese capital with its last colonial outpost in Asia.

An interesting byproduct of growing Portugal-China trade relations is an increasing interest among Portuguese people in learning Putonghua and among Chinese people in learning Portuguese. Before the handover, most of the adult learners of Portuguese in Macau were civil servants and they were required to study the language if they wanted to be promoted. Now people are studying it by choice.

Portuguese-language classes were launched at the University of Hong Kong a few years ago.