USA and China commercial war over port of Sines in Portugal

The port is closest to the United States shale basins on the east coast and is in the same direction as the Panama Canal. American companies wanted to expand the port’s liquid natural gas terminal to increase their gas exports to the continent, which would reduce Europe’s dependence on Russia. The United States ambassador in Portugal, George Glass, said that the investment proposed by the USA would convert Sines into “Singapore from the West”. China, on the other hand, aims to build a mega port of containers there. It is a €640 million project that can play a key role in the Belt and Road Initiative, of which Portugal has been a part since 2018.

At the time, President Xi Jinping borrowed an ancient Chinese saying to describe the bilateral relationship: “A partnership forged with the right approach defies geographical distance; it is thicker than glue and stronger than metal or stone.” Portugal’s President Marcelo Rebelo de Sousa reciprocated with a state visit to Beijing in late April that also coincided with the 2nd Belt & Road Forum.

It also becomes important to mention that the relations between Portugal and the United States of America started as early as the USA itself, as an independent country. Following the American Revolutionary War, also known as the American War of Independence, Portugal was the first neutral nation to recognize the United States of America as an independent country and establish diplomatic relations between both entities. Portugal is hence on track to become a United States E1 and E2 treaty country, which will allow new Portuguese citizens to live and work in the US. Read more about how Portugal - USA relations are strong and have a great future ahead. 

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Chinese investors have become the biggest single shareholders in Portugal’s leading power and national grid utilities, and in 2018, the two-way trade exceeded €10 billion, an increase of more than 7% from the previous year. This thanks to Chinese firms have invested vast sums in a lot of Portuguese sectors: electricity, oil, transport, financial services, insurance, health, real estate, hospitality, and the media, to name a few, turning Portugal into a recipient of Chinese investment per capita in Europe, after the crisis, in 2014.

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The rising economic footprint of China in Portugal has drawn both Washington and Brussels’ attention. Ambassador Glass warned last month, November, that if Portugal continues with Huawei’s 5G network, sanctions could be imposed on Portuguese companies with Chinese investment, adding that it would have consequences in terms of security and defense if they do so. In response, the Portuguese Prime Minister, António Costa, argued that Chinese shareholders in Portuguese companies play an essential role in providing stability and development and alerted Brussels that the misuse of new security procedures for screening Chinese investments could lead to Europe becoming more protective.

The port of Sines, located 100 kilometers south of Lisbon, has always been coveted by foreign powers for its geostrategic importance. Romans, Visigoths, and Moors established settlements along with its deepwater port. It was from here that Vasco da Gama set out to build Portugal’s maritime empire in the 15th century, creating Portuguese colonies in Goa, India, and Formosa and Macau, China, having returned the latter to the Chinese only in 1999.