President Xi of China had no sooner returned home from his two-day stop-off in Portugal last night than his country was plunged into a new level of ‘suspicion’: this time over the arrest in Canada of a highly-placed executive of China’s telecoms giant Huawei.
Official explanations centre on “possible violations of sanctions against Iran”.
But gut reactions coming out of China are that this is simply an escalation of ‘bullying tactics’ because the United States cannot compete with Huawei on the market.
Whatever the truth, the instant results is that stock markets everywhere, including Lisbon, have gone into reverse.
Meantime, the reality is that Huawei’s level of sophistication has made strides into the telecom sector as western governments power fears that its equipment “could be used to expand China’s spying ability” (BBC).
Although Huawei has consistently denied any kind of Chinese government control, BT in the UK has already blocked the company’s technology from the emerging 5G network. New Zealand and Australia have acted similarly. But this far Portugal has shown no such antipathy. Quite the opposite in fact.
Sales of mobile phones are going through the roof, and the company today announced that it is “increasing its digital ecosystem in Portugal” by expanding into the laptop/ tablet market.
Earlier this week, Altice confirmed that it too has no concerns over a partnership deal with Huawei for Portugal’s emerging 5G roll-out.
Said Alexandre Fonseca, CEO of Altice Portugal: “We are tranquil and confident… Chinese investment, from the technological point of view, is important for the development of our networks and technology innovation”.
As the diplomatic storm develops over the Atlantic, today’s tabloids describe how prime minister António Costa “broke from protocol” yesterday to take “a long walk with President Xi in the gardens of Queluz national palace”.
By that time, Xi may well have known of the arrest of Huawei’s chief financial director, but the stock markets had yet to catch on.
Today, ECO online describes “a wave of losses” in Lisbon, with GALP down almost 4% and shares generally taking the biggest hit for the last two years.
