There has been an overall improvement in the global economic situation from 2017 onward. Some of the world’s major economies have shown signs of recovery, the global financial system continues to improve, and global demand has grown steadily. According to the International Monetary Fund (IMF), global economic growth rose from 3.2 percent in 2016 to 3.6 percent in 2017, with a forecast of a 3.7-percent growth for 2018. The global economy has gradually improved, driving the recovery of global trade. China has posted a significant economic recovery, continuing to show signs of sustained growth supported by strong and steady demand, making China one of driving forces of the world economy and a strong promoter of the liberalisation of international trade.
Trade between China and Portuguese-speaking Countries from January to November 2017
In a context of high growth in China’s trade-sector demand and a favourable foreign trade environment for China’s economy, there was a rapid growth in Chinese imports and exports in 2017; in particular in trade between China and Portuguese-speaking Countries. According to statistics from the General Customs Administration of the People’s Republic of China, the total value of trade between China and Portuguese-speaking Countries amounted to US$107.755 billion from January to November 2017, a year-on-year increase of 29.47 percent, exceeding the total amount of US$90.87 billion recorded in full-year 2016. Portuguese-speaking Countries sold goods worth US$74.756 billion to China in the first 11 months of 2017 – a 32.21-percent increase year-on-year. The value of China’s merchandise exports to those countries reached US$32.999 billion in the same period, up 23.66 percent year-on-year.
The official data show that, between January and November 2017, trade between China and Angola and China and Brazil, respectively, grew rapidly. Bilateral trade between China and Brazil totalled US$80.034 billion (accounting for 74.27 percent of total trade between China and Portuguese-speaking Countries), up 29.19 percent from the prior-year period. Trade between China and Angola was worth US$20.657 billion (representing 19.17 percent of total trade between China and Portuguese-speaking Countries), up 45.14 percent year-on-year.
China’s investment in Portuguese-speaking Countries
In 2016, China’s direct investment in Portuguese-speaking Countries totalled US$399 million, a significant increase of 263.7 percent compared to the previous year, according to official data. The volume of direct investment in these countries totalled US$5.699 billion in 2016, a year-on-year increase of 26.5 percent. Among Portuguese-speaking Countries, Angola and Brazil are the main destinations for Chinese investment, mainly in the areas of agriculture, fisheries, energy, finance, infrastructure, transportation, the automobile industry and machinery. Data show that in 2016, Brazil, Angola and Timor-Leste were the fastest-growing countries in terms of China’s foreign direct investment flows, with increases respectively of 297 percent, 85 percent and 63.6 percent in such inputs. Brazil remains the largest recipient of Chinese investment.
In relation to Mozambique, according to investment statistics for the first half of 2017, released by that country’s Investment and Export Promotion Agency (APIEX), China became the largest foreign investor in Mozambique in that period, replacing the United Arab Emirates and South Africa (its largest foreign investors in the period 2011-2016).
Analysis of the investment and trade environment between China and Portuguese-Speaking Countries
The global environment in trade and investment between China and Portuguese-speaking Countries is expected to continue to improve and both sides have shown strong domestic demand in their respective economies that will continue to support the growth in trade between the two sides. However, with the global economy still in a recovery phase, there are still many uncertainties regarding the global economy, which creates some concerns for the development of trade and investment between China and Portuguese-speaking Countries.
But there are also signs of a more favourable environment in trade between the two sides. First, China and Portuguese-speaking Countries have sufficient internal demand to sustain their economic and trade cooperation. China’s economy is expected to maintain steady growth, through a restructuring of its economy, and driven by innovation, transformation and modernisation of traditional industries; and the emergence of new industries. Portuguese-speaking Countries, which have structural characteristics in their economies that are compatible with the characteristics of China’s economy, will promote economic and trade cooperation between China and Portuguese-speaking Countries.
Second, China is committed to promoting a more open economy, in particular by creating free trade zones around the world. In May 2017, Chinese President Xi Jinping proposed at the “Belt and Road Forum for International Cooperation” that the “China International Import Expo” be held annually from 2018 onwards. The first edition will take place in Shanghai from November 5 to 10, 2018. The event will have a total exhibition area of more than 240,000 square metres, with important displays such as the area for countries and the area for businesses. This event provides an excellent window of opportunity for Portuguese-speaking Countries to export to China.
Third, Macao’s role as a platform has been steadily improved. With the support of the Central Government, the Macao SAR Government has made continuous efforts, making positive progress in building Macao as a Commercial and Trade Cooperation Service Platform between China and Portuguese-speaking Countries. With the economic diversification of Macao, as well as the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the “Mainland and Macau Closer Economic Partnership Arrangement”, the advantages of Macao as a Commercial and Trade Cooperation Service Platform between China and Portuguese-speaking Countries become even more evident.
The development of economic and trade cooperation between China and Portuguese-speaking Countries has also been affected by some unfortuitous factors such as uncertainties related to a sustained and stable recovery of the global economy. While overall economic growth has been booming, there are still uncertainties and risks in financial markets; prices of goods are not yet stable, and the development of trade still suffers from a certain imbalance. The recovery of the world economy is still relatively weak.
It is expected that the world economy will continue to recover slowly but nonetheless create new development opportunities. Given the weak growth in the global economy, economic and trade cooperation between China and Portuguese-speaking Countries will be affected to some extent. However, due to the existence of more favourable factors, the emphasis on the development of economic and trade cooperation between China and Portuguese-speaking Countries will remain unchanged, and the growth rate in such activity is expected to remain stable.
