Portugal was the fourth country in Europe to receive the most Chinese investment in the last ten years, ahead of much larger economies such as Spain or even Italy, according to a new comparative study.

The study by the Rhodium consultancy, prepared for the Baker & McKenzie law firm, analyses total transactions between 2004 and 2014, which was by far the year in which china invested most in Europe, and shows that Portugal even came in ahead of Germany.

In 2014, the study said, China’s total investment in Europe was US$18 billion, or double the previous year, with Chinese investors focussing on the United Kingdom (US$5.1 billion), Italy (US$3.5 billion) and the Netherlands (US$2.3 billion).

Portugal had similar amounts of investment – US$2 billion in fourth place – followed by Germany (US$1.6 billion).

The largest Chinese investment in Portugal in 2014 was in the insurance sector – the purchase of insurance company Tranquilidade by Fosun, which was already a shareholder of the Portugal’s power grid company REN.

Chinese individual investors have shown a strong appetite for Portuguese real estate, especially since the launch of “golden visas” providing euro zone residence permits to people who invest at least 500,000 euros in property.

Since 2000, the study noted, the UK has been by far the largest investment destination – US$16 billion – followed by Germany (US$8.4 billion), France (US$6.7 billion) and Portugal (US$6.7 billion).

Some analysts have pointed to higher amounts invested by Chinese investors in Portugal, in the order of US$10 billion.

When the total amount invested is considered in relation to the size of the economy, the “stock” of FDI in recent years or the size of the capital market, Portugal is clearly the country in which the weight of Chinese investment is highest.

The four sectors that attracted the most investment in Europe in 2014 were food and agriculture (4.1 billion euros), energy (3.7 billion euros), real estate (3 billion euros), the automotive industry (2.2 billion euros) and financial and business services (1.7 billion euros).

Out of these sectors, Portugal received few Chinese investments in agriculture and the automotive industry, and technologies are expected to receive the next wave of investment, according to Rhodium.

“The trend will continue in any scenario, but the magnitude and shape of Chinese investments will depend on developments in Europe,” said Thomas Gilles, specialist at Baker & McKenzie for China.

The news comes at a time when the Portuguese press is reporting the interest of major Chinese companies such as the Bank of China and Fosun International in Novo Banco, the bank that inherited the “healthy” assets of Banco Espírito Santo, rescued by an interbank fund in the summer of 2014.

If this interest is confirmed, this may be the biggest investment ever by China in Portugal, alongside power company EDP – Energias de Portugal by China Three Gorges, the largest privatisation ever undertaken in the country, at a time when the country was forced to sell assets to comply with the terms of the 2011 financial bailout. (macauhub/CN/PT)