Sat, 17 Apr 2021

Portugal Envoy Urges US to Counter Chinese Bid at Key Seaport

Voice of America
06 Mar 2021, 18:05 GMT+10

WASHINGTON - Once the seat of a powerful maritime empire, Portugal is attracting attention from today's great powers. Analysts warn that unless the U.S. moves quickly, China will soon expand its control over a key Portuguese seaport.

A month from now, the fate of a new terminal at the Port of Sines on Portugal's southwestern coast is scheduled to be decided.

Sines is "the first deep water port if you go from the United States to Europe, so it's a very important infrastructure," Domingos Fezas Vital, Lisbon's ambassador to the United States, said in a phone interview.

In 2012, the People's Republic of China acquired a stake in one of the four terminals at the port, drawing attention to Beijing's strategic design.

"We now have an international bid for a fifth terminal, which will be a second container terminal," Fezas Vital told VOA. "We would very, very, very much like to have American companies competing for this bid; I think it will be very important to have an American presence in Sines."

He said it was unimportant whether that bid was "American only (or) American together with friends and allies."

Eric Brown is a senior fellow at the Hudson Institute with a focus on Asia and global strategy.

"It's clear when you look at the PRC's Maritime Silk Road -- the oceans-focused component of the Belt and Road Initiative -- that one of their ambitions is to control the littorals of Eurasia and large parts of Africa," he said in a phone interview. "And I would say that in the grander imaginings of things, that also includes Latin America.

"One of the ways in which they're attempting to acquire that control is through politically directed economic investments through state-owned enterprises and state-directed enterprises in critical ports that skirt the Pacific, the Indian Ocean, the Mediterranean, and increasingly the North Sea and the Baltic states," he said.

Seen from that perspective, "control of Sines, which is important for the Iberian economy and for southwestern Europe as a whole, is of enormous consequence," he said.

Brown sees Chinese behavior as that of a "power trader," an idea recently put forward by Robert D. Atkinson, president of the Information Technology and Innovation Foundation. Atkinson writes that China's success in recent decades can be compared to Germany's achievements from 1900-45.

Map of Portugal Portugal

The thesis that Germany acted as a "power tradet" that used trade as a key instrument to gain commercial and military advantage over its adversaries was originally put forth by the late economist Albert O. Hirschman in a book entitled National Power and the Structure of Foreign Trade, published in 1945.

What Germany did then, as China does today, is to "exploit the fullest possibilities inherent in foreign trade" to enhance its own power relative to other nations. Atkinson argued that pre-World War II Germany's national policies and programs "were designed not only to advance its own economic and military power, but to also degrade its adversaries' economies."

Clyde Prestowitz, founder and president of the Economic Strategy Institute, said America currently lacks both an awareness of what's at stake and the tools necessary to counter the efforts of state-backed Chinese corporations in places like the Port of Sines.

"How many congressmen and senators do you think will have any idea that Portugal wants a U.S. investor in the terminal?" he asked.

Prestowitz, author of a new book centered on America, China and the struggle for global leadership, believes the current model of conducting business and politics, as practiced by the U.S. and other democratic nations, needs to be retooled in order to meet the challenge posed by Beijing.

Under the Chinese model, state-owned corporations are directed to make investments and bids that "a normal company wouldn't make," Prestowitz said.

By contrast, "our way, the American, the Anglo-Saxon, the democratic way of running an economy is that the government doesn't make investments, independent companies are supposed to do that. So this notion of the union between government and business and state-owned corporations and - state-guided corporations - is foreign, is alien to the whole concept of how we run a government," he said.

Ship containers are moved at the port of Sines, in Sines, southern Portugal, Feb. 12, 2020. (AP Photo/Armando Franca) FILE - Ship containers are moved at the Port of Sines, in Sines, Portugal, Feb. 12, 2020.

In order to not lose out to Chinese state-backed bids for key infrastructure projects like the Port of Sines, Washington may just have to take a page from Beijing's playbook, Prestowitz suggested, and put more government muscle behind corporate initiatives.

While American conservatives have traditionally been most skeptical about government efforts to direct the economy, Prestowitz welcomed a Republican-led move under former President Donald Trump in 2019 to reorganize two existing agencies into the U.S. International Development Finance Corporation.

The move, he said, was a good start toward giving the United States the tools to fight back against China.

Atkinson, for his part, proposes the establishment of a NATO-like trade alliance that would be able to respond "bravely, strategically, and expeditiously" to Chinese economic expansionism and power projection.

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