China Portugal’s fifth largest investor

China was Portugal’s fifth largest investor when it comes to overseas Foreign Direct Investment in the second quarter of 2023, responsible for 6.8% according to the Bank of Portugal.

China invested €11.8Bn in the second quarter which compares to the €12.5Bn that had been invested by the Chinese in Portugal at the end of the first quarter of the year.
The slight fall in QoQ investment (5%) has come at a time when China is once again spooking the financial markets after its economy cooled in the second quarter of the year, accompanied by a significant fall in exports, credit and weaker consumer demand.
Added to this is the pre-existing risk of a collapse in the Chinese real estate market which would have an even greater impact on investor confidence and the financial markets than the collapse of Chinese construction company Evergrande earlier this month.
In the second quarter the largest direct foreign investor was Spain with €25.5Bn, France (€16.9Bn), and the United Kingdom (€13.6Bn).
Portugal was also on the list (€26.4Bn) as a final investor because of a phenomena called ‘round tripping’ meaning investment originating and ending in Portugal through intermediary entities based in other countries such as the Netherlands or Luxembourg.
All told, the sock of FDI in Portugal increased slightly to €173.8Bn in the second quarter of the year.