China is the fifth largest investor in Portugal. Spain the first


The Chinese economy uses other countries to make most of its investment in Portugal. Only 28% of what it invests comes directly, 41% comes through Luxembourg.

The investment does not come directly from the Chinese economy but, in fact, China is the fifth largest final investor in Portugal - and not the ninth, as suggested by a simpler analysis of foreign direct investment statistics. The data were revealed this Tuesday by the Bank of Portugal, which developed new statistics, and show that China uses Luxembourg, and other countries, to make most of its investments in the Portuguese economy.

Looking at the final investment data in a simpler way, considering only the immediate destination of the funds, China is the ninth direct investor in Portugal, with a very short share of foreign direct investment in the country, 2% of the total stock in 2021.

But with the more complex structures of the companies, and the formation of multinationals and large groups, there are countries where investment is only made in passing through and does not have its final destination there. This is the case with much of the investment that goes through Luxembourg. The new statistics from the Bank of Portugal allow us to understand what the final destination of the investment is. In the case of China, only 28% of the investment made in Portugal comes directly from the Chinese economy. 41% of what was invested in the Portuguese economy did so through Luxembourg and 22% via Hong Kong - always considering stocks, not flows.

Considering this view of analysis, China becomes the fifth largest investor in Portugal, with 6.8% of the total stock invested in 2021 in the country.

Looking at specific sectors, China's position becomes even more dominant. 38% of direct investment made in the electricity, gas and water sector in 2021 is Chinese. France accounts for 17% and Spain for 7%.

Even correcting for foreign direct investment flows to detect the final destination of the funds, Spain remains the largest investor in the country, although with a less dominant position in the total stock, the data show.

The second largest investor, in fact, is the Portuguese economy itself, which also resorts to third countries and then channels the investment back to Portugal. Among other reasons, this strategy serves to diversify risks, obtain tax gains and access other markets. Portugal uses mainly the Netherlands and Luxemburg to make these operations.

O terceiro maior investidor final em Portugal é França, que também usa o Luxemburgo para canalizar 28% do seu investimento em Portugal, seguida do Reino Unido, em quarto lugar. Os dados mostram que o Reino Unido tem uma posição preponderante no setor das indústrias transformadoras, respondendo por 31% do investimento.

Source: AICEP