Massive project “could represent 4% of Portuguese GDP in 2028”
The project by Chinese group CALB to build a mega lithium battery factory in Sines, which could represent 4% of Portuguese GDP in 2028, is being reconsidered, reports Jornal Económico.
This could be a situation stemming from the decision to remove Huawei from the national 5G networks. As the online explains, when the decision was announced, China issued fairly blunt ‘warnings’ and it was widely accepted that Portugal could see retaliatory measures, like the “rethinking of investments” (for whatever pretext).
Equally, the CALB group (standing for China Aviation Lithium Battery technology) is having problems in China itself, says JE.
“In May, the group, which is China’s third largest manufacturer of lithium batteries, fired 2,000 young graduates it had recently hired, in a volte-face that caused controversy in a country that has the challenge of placing in the labor market a staggering ten million young graduates every year.
“The mass dismissal was justified by the need to make a “business adjustment” and the dismissed young people received compensation of three thousand yuan (about 350 euros.
“The Jiangsu provincial government opened an investigation into the case and the CALB group has been heavily criticized in the Chinese press and on social media.
“Another setback was the defeat in March in a lawsuit that had been filed by the market leader in China’s lithium battery sector, CATL. CALB was fined €3.7 million euros for violating competition rules”.
Jornal Económico says it has tried to obtain clarification from the CALB group, “but has so far received no response”.
Factory was to have covered 92 hectares in Sines Industrial and Logistics zone
As far as the online has been able to verify, a memorandum of understanding for construction of the plant was signed last November. Since then there have been no significant developments in the partnerships that CALB appears to have formalised with Portugal.
Some sources have told JE that “the Chinese side has not yet notified the Portuguese government about a possible decision to suspend the project, which was presented last year by the Minister of Economy, António Costa e Silva, as a decisive step towards the installation of an electric mobility cluster in Portugal.
AICEP too (Portugal’s Agency for Investment and Foreign Trade) has assured Jornal Económico, through an official source, that the project remains “active” (but without giving more details about its real progress, beyond what has already been reported.)
“The Chinese manufacturer’s project entered the environmental licensing process in February. On March 1 a contract was signed to reserve surface rights over 92 hectares in the Sines Industrial and Logistics Zone (roughly the size of 129,000 football pitches), managed by AICEP Global Parques. Production is scheduled to begin in 2025, with a capacity of 15GWh. At the end of last year, a company official told Lusa news agency that at cruising speed, between 2028 and 2030, the factory should represent around 4% of Portuguese GDP, thus surpassing the contribution of Volkswagen’s Autoeuropa”.
CALB itself described the project as a “world-leading, highly intelligent, computerized and automated factory, with zero carbon emissions.“
“However, in the same communication, which took place in the final stretch of its process of going public in the Hong Kong stock exchange, the Chinese company left the caveat that the agreement in question was not yet legally binding, so the project could go ahead, or not”.
Jornal Económico says it has “tried to obtain clarifications from the Ministry of Economy, but so far it has not been possible to obtain further details from official sources”.
Huawei decision “may lead to suspension of several Chinese projects”
Sources heard by Jornal Económico believe that if Chinese projects planned for Portugal end up being suspended, the suspension “will be presented as a decision of the companies themselves and not of the Xi Jinping government, despite the significant influence” that President’s Xi’s regime has on them.
And the suspensions may, in the final analysis, have little to do directly with Huawei. Chinese companies may simply fear that the Huawei decision is a flavour of things to come “at a time when other European countries, such as Italy, have raised barriers to the presence of Chinese capital in sectors considered strategic. On the 17th, the Rome government confirmed that it will intervene in Pirelli to limit the access of Chinese shareholder CNRC to the sensor technology of its tyres”, for example.
Says the online, “the decision to remove Huawei from national 5G networks, first reported by Jornal Económico on May 25, caused a small earthquake in relations between Portugal and China, as it contradicted several statements made by Portuguese policymakers in recent years and thus took Beijing by surprise.
“The Chinese Ministry of Foreign Affairs took several days to react publicly to the announcement, having sent a note to Lusa, last June 8, stating that it hopes that “the Portuguese side makes rational policy choices autonomously and adheres to the creation of an open, fair and non-discriminatory business environment.
“Nonetheless, Major-General Carlos Branco and Ambassador Francisco Seixas da Costa have both told JE that the CALB issue, “and any other that may follow”, will most definitely be part of “a clear retaliation measure against what happened with the expulsion of Huawei from the national 5G system.
“It will be a retaliation that is not only expected but also understandable,” said Carlos Branco, who is convinced that retaliatory measures “will not stop here”.
Carlos Branco is a retired major-general of the Portuguese Armed Forces, and has in the past been described as both communist, and pro-Putin. He prefers to think of himself as neutral.
According to JE, the major-general believes “retaliation has a long way to go (…) We are making a clean slate of centuries of relations. Let’s see what will happen to Macau, to Forum Macau and everything that is involved there”, he added. And recalling that “the Chinese have projects in the context of Portuguese-speaking countries.
“At the University of Macau there is a chair (or whatever you might call it) on China and the Portuguese-speaking countries”. In other words, these are relationships that cannot be jeopardized by a decision by the National Council for Cyberspace Security regarding Huawei – which is what, in Carlos Branco’s view has been done, “with the utmost evilness”: “China’s vice-president, Han Zheng, was in Portugal a few days before the decision, met with António Costa and nobody told him anything”, Branco adds.
For Seixas da Costa, CALB’s decision is obviously “a retaliation” that was not anticipated because it was not wanted, says the online. This is despite the fact that the political analyst considers that the decision taken by the National Security Council “is part of a broader framework of a similar decision in the European context.
It is worth remembering that the UK was the first European country to sideline Huawei on 5G (in late 2020). Shortly afterwards, in February 2021, the House of Commons Science and Technology Committee published a report highlighting that the 5G process was rendered more expensive as a result, and delayed, says JE.
This is almost certainly what will happen in Portugal, too.
Source material: Jornal Económico/ ECO online
