US ambassador says ‘absolutely no’ to Chinese EDP takeover bid
US ambassador to Portugal George Glass has spoken out yet again to denounce Portuguese plans for further business with China.
Just two weeks since he called a press conference to warn of the involvement of Chinese tech giant Huawei in Portugal’s developing 5G network, Mr Glass has announced that ‘under no circumstances’ will the US sanction the Chinese bid to take over EDP.
Announced months ago, the OPA (as it’s called here, standing for public acquisition offer), presented by electricity giant China Three Gorges, has failed to move forwards.
Writing earlier this week, Deutsche Welle news website suggested this was “probably because of concerns expressed by the United States. EDP also has operations in the US”.
George Glass’ message totally confirms this.
Stressing that it is a question of “national security” that critical infrastructures should not pass into foreign hands, he told negocios online that “under no circumstances will the Chinese control what EDP has in the US, the third largest producer of renewable energy”.
If China Three Gorges “insists in continuing” with the OPA, America’s committee evaluating incoming foreign investment will have to step in and block the sale with regard to any EDP interests in the US.
Where that leaves Portugal is ‘complicated’: Glass has already piled pressure on Portugal’s close ties with China – saying inclusion of Huawei in 5G could “affect relations in terms of NATO” (click here).
He has stopped short of saying what will happen ‘if’ China Three Gorges doesn’t drop the bid, but what he said he ‘could say’ was that “when situations like these have occurred in the past, these entities have not been allowed to conclude their business”.
The complications nationally are that when China Three Gorges’ bid was first announced, the government appeared ‘not to be opposed’ to the idea (click here).
As Deutsche Welle explains: Chinese companies have pumped billions of euros into Portugal since the country found itself in a debt crisis, beginning in 2010. They have purchased a number of Portuguese firms, including the previously state-owned power grid operator REN, the nation’s largest insurance company, private hospitals as well as banks. Critics describe it as a ‘sellout’.”
But in Portugal political leaders viewed Chinese investment as a lifeline.
“Beijing came to Lisbon’s rescue. China, for instance, bought Portuguese government bonds, which nobody else wanted to buy at the time”, concedes Deutsche Welle.
As MEP Ana Gomes commented “the troika literally pushed Portugal into the Chinese arms”, to the extent that prime minister António Costa is now seen as a kind of war horse, battling in China’s favour.
Thus how China Three Gorges’ OPA fares is still ‘anyone’s guess’. But the United States has definitely shown Portugal what it feels.