Bank of China to Open in Portugal

China - Hong Kong

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For the first time, the Bank of China will open a branch in Portugal in March, which is a major step forward for the two trading partners. The decision comes after a meeting between the leaders of Portugal’s Socialist Party and the head of the Chinese bank, which is run by the state. It is expected that this decision will lead to a number of new partnerships between the countries going forward.

Although this is the first official delegation to be opened in Portugal, banks in both countries have developed a number of contacts over the years. As a result, it was only a matter of time before the banking industries in Portugal and China started coming together. The strength of the Chinese economy can help Portugal’s development, as many Chinese businesses would be willing to invest in the country, creating jobs for the Portuguese people.

The meetings between representatives from the two countries lasted six-days, after leaders from the Chinese Communist Party invited their Portuguese counterparts to Beijing. Members of the Portuguese Socialist Party brought ten prominent industrialists with them to gauge how this partnership would affect industry in Portugal. This was the first time that a banking delegation had been discussed, even though the countries have had a political relationship since the early 1980s.

Perhaps one reason for this taking place is the investments that the Bank of China has made in Portuguese industry in recent years. Energias de Portugal, which provides power to much of the country and is one of Portugal’s largest companies, borrowed 1 billion euros from the bank last year. Energias de Portugal and the Bank of China also agreed to another 1 billion euros to be loaned at the beginning of 2014. Because China now has such a large influence on the Portuguese people, taking it to the next level became necessary.

In addition, China Three Gorges has purchased 21.35 percent of Energias de Portugal, which makes it the company’s largest shareholder. The company was only recently privatized, so sales of these shares are still in their infancy. China Three Gorges paid about $2.7 billion US for these shares.

Another major transaction occurred when Redes Energéticas Nacionais, which is a Portuguese power grid company, sold 25 percent of its shares to Chinese state-owned organization China State Grid Corporation. This sale cost the Chinese government about 287.15 million euros, but furthered China’s influence over Portugal.

Overall, these changes are good for Portugal, as they will bring more money to the country’s growing economy. The last few years have been tough on Portugal and much of Europe, but the country is showing signs of recovery because of these decisions that the Socialist government has made. In the future, we will likely see more foreign investment in the country, which is sure to create more opportunities for the Portuguese people as a whole.

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Published in: Business / Money / Portugal Property