Taking your blessings and sailing away
It was October of last year when China’s premier Li Keqiang announced the Chinese central government 19 measures to benefit the Macau SAR’s role as the connecting link between the Mainland and Lusophone countries.
Measures that were announced at a grandiose 5th Ministerial Conference of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking countries held in Macau.
These 19 measures included support for the MSAR to set up a renminbi clearing centre for Portuguese-speaking countries as well as an export credit insurance system; establishing the headquarters of the Sino-Luso Development Fund in the MSAR; developing the marine economy; boosting businesses in the Pearl Delta River region wishing to invest in Macau; while looking to boost large-scale Chinese e-commerce companies wanting to co-operate with local enterprises wishing to expand the e-commerce market in Lusophone countries.
Aside from the guidelines coming from the top echelons, the conference also resulted in 17 memorandum agreements for cooperation being signed between China and Lusophone countries and 100 agreements signed between businessmen from several sectors, such as infrastructure, finance, energy, technology, agriculture and commerce.
Now more than a year has passed since the conference and the wheels have been put in motion to make Macau play the role apparently assigned by history.
It was October of last year when the Chinese central government announced 19 measures to benefit the Macau SAR’s role as the connecting link between the Mainland and Lusophone countries.
The US$1 billion China and Portuguese-speaking Countries Cooperation and Development Fund temporary headquarters at the Macau Trade and Investment Promotion Institute (IPIM) was inaugurated in June, with the contract for building its future home – the Sino-Luso commercial co-operation complex – being awarded.
The complex to be placed near Baia da Praia Grande and will host forums for Sino-Luso co-operation, an exhibition centre for food products from Portuguese-speaking countries, a business service centre for enterprises from Forum countries, a training centre, an information centre, an exhibition hall showcasing Sino-Luso relations and their cultures, and a room to stage exhibitions related to Macau’s urban development.
Meanwhile finally a representative of the African country of Sao Tome and Principe joined the Forum Macao delegation after its diplomatic relations were reinstated with People’s Republic of China, completing the full team roster of Lusophone countries.
Facing the risk
With the economic co-operation between mainland China and Lusophone countries intertwining inevitably with its One Belt, One Road initiative many questions remain over the role of Macau as a platform.
With the majority of the business deals being taken by Chinese State Owned companies what role can Macau businessman and SME’s play?
Can the city become an effective outpost for import and export in the plan? How can the city better use its Portuguese language heritage to the benefit of Greater China?
After all, the volume of Sino-Luso trade is undeniable, just like its consistent growth.
Just in the first seven months of this year commercial trade between mainland China and Portuguese-speaking countries increased by almost 31.3 percent year-on-year, reaching US$67.61 billion.
Just Brazil, the largest Portuguese speaking trade partner with mainland China, saw its bilateral trade volume reach US$49.90 billion between January and July, a yearly increase of 30.5 percent.
After Brazil, the African country of Angola and Portugal composed the top-3 of Lusophone trading buddies, with a trading volume of US$13.37 billion and US$3.17 billion, respectively.
One of the crucial elements that can allow local businessmen to take the necessary risks to take part in overseas ventures is a banking sector willing and able to take risks and fund courageous endeavours.
In September the chairman of the Portuguese state-owned financial group stated its subsidiary in Macau is a particularly well-placed bank to promote the commercial relationship between China and the Portuguese-speaking countries, with the centenary Macau bank being one of the Portuguese’ banks best performing overseas operations.
The bank’s President pointed out that most of the trade relationship with the Portuguese-speaking countries takes place in China and that its local subsidiary – by opening a branch in Hengqin Island and having a representative office in Shanghai – was in the best position to contribute to that relationship.
Another Chinese banking powerhouse has also set up a Portuguese-speaking team at its Macau branch in order to better provide better banking services for savings, loans, settlement, clearing and trade finance to customers in Sino-Luso trade.
Also, in September of this year, IPIM allowed the opening of offshores related to trade and services between Portuguese-speaking countries and mainland China, in an effort to attract investors expecting to choose Macau as a stepping stone for products and services trade.
However, cooperation in the China-MSAR-PLP axis is not just solely focused on export and import trade.
There are several examples of local companies adding an essential element of Portuguese language knowledge and networking that can make the difference to the powerful Chinese state-owned companies in finding deals for developing much needed infrastructure in some Lusophone countries.
A local construction company has achieved several projects in Mozambique and East Timor in the last three years, having signed an agreement to build 35,000 housing units in the African Lusophone country, in partnership with Chinese state-owned construction companies, and is currently undergoing the viability study to develop a thermal station in the same African country.
Another local finance and law consultancy service company also made use of its members Portuguese language and law knowledge to intermediate a fishing project between East Timor and the Chinese province of Zhejiang.
Meanwhile, it seems the establishment of a long awaited export credit insurance system in the city will finally allow local import-export companies to cover some of the risk of dealing overseas.
It’s elements like this that assure Macau will continue to help Chinese business expand and continue to new worlds, a role it has played ever since Portuguese traders were first allowed to carry out trading activities in the city in 1535.