MB September 2019 Special report | 40 Years, 40 Companies
Fosun – insurance, bank and health
If China Three Gorges is the largest Chinese business ‘brand’ in Portugal, Fosun is the largest investor.
In 2014, with the support of Chinese state-owned banks and benefiting from strong indebtedness, Fosun secured the purchase of 80 per cent of Portugal’s largest insurance group, Fidelidade, from Caixa Geral de Depósitos (owner of BNU in Macau), for more than MOP9 billion. Fosun now holds 85 per cent of Fidelidade.
Two years later, Fosun diversified its portfolio and became the largest shareholder of Portugal’s largest private bank – Millennium bcp – acquiring 16.7 per cent for MOP1.5 billion. Fosun currently holds 27 per cent of the bank.
The most Chinese of the Portuguese banks, BCP announced this year the launch in Portugal of the Alipay payments platform of Chinese giant Alibaba, seduced by the increase of Chinese tourists to Portugal.
But the interests of Fosun in Portugal are not limited to banking and insurance: the company owns one of the main health groups, with several hospitals, like Luz Saúde.
All in all, Fosun has already invested some MOP25 billion in Portugal (€2.8 billion) and stands out in the list of major Chinese investments made in that country.
Haitong – investment bank
Portuguese Haitong Bank, S.A. – ‘a leading investment bank and securities firm in China with a broad international footprint’ – is part of Haitong Securities Co. Ltd.
In 2015, Banco Espírito Santo de Investimento, SA (BESI) was put up for sale and Haitong Securities Co., Ltd. offered the most (MOP3.4 billion).
Upon its acquisition by Haitong Securities, Haitong Bank aligned its product offering leveraging its Sino-European and Sino-Latino American business flows.
Haitong Securities Co., Ltd. is one of the largest and oldest brokerage and investment firms in China, with head offices in Shanghai, is currently represented on four continents with over 340 securities branches, has nearly nine million retail customers and boasts more than 24,000 institutional and high-end customers in Greater China.
Most relevant: all the bank’s global activity is managed from its head office in Lisbon. This means that it is from Portugal that Haitong manages its businesses in Sao Paulo, Dublin and London.
Haitong Bank heads the investment banking ranking in Portugal. After the first few years the company added up losses, with 2018 the first year accounts were in the black.
Last July it was announced that Haitong intends to open a branch in Macau ‘to strengthen one of its differentiating elements, which is based upon access to the flow of business with China. Haitong Bank has a very clear strategy by combining its local experience in domestic markets in Europe and Brazil with a deep knowledge of China.’
Huawei – more than smartphones
Huawei was the smartphone company that sold the most in Portugal in 2018, ending the seven-year reign of Samsung. One in three mobile phones bought in Portugal are from this Chinese brand.
But Huawei’s connection to Portugal is not limited to trading.
Since the beginning of this century, the brand has maintained investments, namely with the opening of a service centre in Lisbon and the creation in 2006 of a training centre.
Huawei’s Vice President for International Development, Jonson Hu, went so far as to say that the company’s aim was to “locate more and more” operations in Portugal.
In 2010, Portuguese main telecommunications operator PT signed a strategic co-operation agreement with Huawei Technologies, which provided for the creation of another operations centre in Portugal and the creation of 150 jobs. The strengthening of the partnership between the two companies was made during the official visit of former President of the People’s Republic of China to Portugal Hu Jintao, and seeks to provide fibre solutions and new technologies for the mobile network.
The latest bet from the company based in Shenzhen is the implementation of a 5G network in Portugal.
Level Constellation – real estate
In 2014, six Chinese investors ‘attracted by the competitiveness and professionalism in the Portuguese real estate market’ created Level Constellation to develop urban rehabilitation projects in Portugal.
Over these five years, Level Constellation has already developed almost a dozen real estate projects, although little is known about the company and the capital invested. Macau Business estimates anything like MOP4.5 billion (between what is done and what is under construction).
In 2016, Level Constellation revealed its intention to invest in excess of MOP1 billion in one large single development, built from scratch in the centre of Lisbon.
The next big project will be inaugurated in the Azores: closed for 27 years, and completely abandoned for the last eight, hotel Monte Palace on São Miguel island is set to reopen as a newly refurbished hotel in 2021.
(One of the six investors is Yonggang Zheng, Chairman, Shanshan Group, the Chinese clothing giant. In 2016 it was reported that Zheng was under increased scrutiny following an alert sent out to all banks, warning that the operation was suspected of money laundering. A Bank of Portugal ‘alert’ warns that ‘any transaction or movement of capital made in the company’s name through financial entities operating in Portugal should be immediately communicated to the Public Ministry and Judicial Police.’)
State Grid – energy
In 2012, state-owned company State Grid spent some MOP2.6 billion for 25 per cent of Portuguese utility REN.
Almost immediately State Grid signed an agreement with this company to establish a research and technological development centre in Portugal and a joint venture to provide consulting services. With this joint venture, State Grid intends to find and undertake co-operation projects in Portuguese-speaking countries.
In 2018, during the last visit of Xi Jinping to Portugal, a new agreement was inked ‘translating the reinforcement of the strategy that has been implemented’. The agreement foresees the continuation of the partnership in the development of the Energy Research Centre as well as the integration of renewable energies in the energy system.
As European regulations claim that there should be a clear separation between energy producers (EDP/China Three Gorges), and the transport and distribution companies (REN/State Grid) ‘this would mean that the Chinese government company State Grid would have to give up REN in order to maintain EDP. But Beijing’s priority is State Grid, the national power distribution company, the second biggest company in the world (US$348.9 bn) according to Fortune 500,’ according to the Portuguese press.
ZTE – equipment
Since 2005 Chinese telecommunications specialist ZTE Cor. (China’s largest public telecom equipment provider) has been a regular presence in Portuguese networks.
The main operators in that European country have signed several agreements with ZTE, as per the decision of Build SDR Network for Portugal’s Optimus, one of the largest providers, enabling the operator to upgrade its GSM/UMTS network in Portugal for a smooth evolution path to LTE (2010).
This agreement between ZTE and Optimus was of major importance: it was the first contract win for ZTE’s SDR technology in Western Europe.
Prior to that the Shenzhen-based telecommunications enterprise had signed a memorandum of understanding for research and development to supply telecommunications equipment and services to global customers with local leading operator Portugal Telecom (now MEO).
The agreement gave ZTE access to markets where Portugal Telecom is operating, and links it to Portugal Telecom partners through international R&D projects in Europe.
ZTE has used Portugal to find companies with a presence in Africa, with IT/engineering/ telecommunications engineers interested in investing in service concessions.
