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ATLANTIC ANCHOR: PORTUGAL IN THE BELT AND ROAD INITIATIVE

GÖKHAN TEKIR

gokhan.tekir@hbv.edu.tr

Associate Professor in the Department of International Relations at Ankara Hacı Bayram Veli

University (Turkey). He earned his B.A. from Bilkent University in 2012, followed by an M.A. from

the same institution in 2014. He completed his Ph.D. at Middle East Technical University in 2019.

His research interests focus on the Belt and Road Initiative, deterritorialization, and digital

geopolitics. Dr. Tekir has participated in country studies as part of delegations commissioned by

the Ministry of Interior of the Republic of Türkiye, including missions to Afghanistan and

Uzbekistan. He is currently serving on a similar delegation conducting research on Hungary. In

addition to his contemporary geopolitical studies, he maintains an academic interest in first-

century Roman strategic thought and has published several articles on the subject. He is the

author of The Belt and Road Initiative: Transforming Eurasian Space (Kriter, 2022).

Abstract

This paper explores Portugal’s engagement with China’s Belt and Road Initiative (BRI) as a

case study in geoeconomic strategy, situated at the intersection of U.S.-China rivalry and

European integration. While much scholarly attention has focused on Central and Eastern

Europe, Portugal's role in the BRI remains underexamined despite its Atlantic location, deep-

sea port infrastructure, and historical ties with China. The study situates Portugal’s

participation in the BRI within the broader framework of geoeconomics, defined as the use of

economic tools to pursue geopolitical aims. Chinese investments in Portuguese energy,

infrastructure, and telecommunications have intensified since the Eurozone crisis, prompting

concerns among Western allies about strategic dependencies. The Port of Sines exemplifies

this strategic tension, attracting interest from both Chinese and American stakeholders. At

the same time, Portugal has advanced its maritime ambitions through “blue economy”

partnerships with China, balancing commercial cooperation with geopolitical caution. The

study further examines the evolving regulatory landscape shaped by the European Union’s

foreign investment screening framework and the United States’ efforts to curtail Chinese

influence in critical sectors like 5G. Portugal’s recent distancing from Huawei and

reassessment of its BRI participation illustrate how smaller states can recalibrate their foreign

policy amid intensifying global competition. The findings suggest that Portugal’s case

highlights the strategic dilemmas of middle powers navigating competing geoeconomic

agendas, revealing how economic connectivity is increasingly instrumentalized for geopolitical

ends in Southern Europe.

Keywords

The Belt and Road Initiative, Portugal, Geoeconomics, Port of Sines, The EU, The U.S.

Resumo

Este artigo explora o envolvimento de Portugal na Iniciativa «Belt and Road» (BRI) da China

como um estudo de caso em estratégia geoeconómica, situado na intersecção entre a

rivalidade entre os EUA e a China e a integração europeia. Embora grande parte da atenção

académica se tenha centrado na Europa Central e Oriental, o papel de Portugal na BRI

continua a ser pouco estudado, apesar da sua localização atlântica, das infraestruturas

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portuárias de águas profundas e dos laços históricos com a China. O estudo situa a

participação de Portugal na BRI no quadro mais amplo da geoeconomia, definida como a

utilização de instrumentos económicos para perseguir objetivos geopolíticos. Os

investimentos chineses nos setores da energia, infraestruturas e telecomunicações

portugueses intensificaram-se desde a crise da zona euro, suscitando preocupações entre os

aliados ocidentais quanto a dependências estratégicas. O Porto de Sines exemplifica esta

tensão estratégica, atraindo o interesse tanto de partes interessadas chinesas como

americanas. Ao mesmo tempo, Portugal tem promovido as suas ambições marítimas através

de parcerias de «economia azul» com a China, equilibrando a cooperação comercial com a

cautela geopolítica. O estudo examina ainda o panorama regulatório em evolução, moldado

pelo quadro de análise de investimentos estrangeiros da União Europeia e pelos esforços dos

Estados Unidos para restringir a influência chinesa em setores críticos como o 5G. O recente

distanciamento de Portugal da Huawei e a reavaliação da sua participação na BRI ilustram

como os Estados mais pequenos podem recalibrar a sua política externa num contexto de

intensificação da concorrência global. As conclusões sugerem que o caso de Portugal destaca

os dilemas estratégicos das potências médias que navegam por agendas geoeconómicas

concorrentes, revelando como a conectividade económica é cada vez mais instrumentalizada

para fins geopolíticos no sul da Europa.

Palavras-chave

Iniciativa Belt and Road, Portugal, Geoeconomia, Porto de Sines, UE, EUA.

How to cite this article

Tekir, Gökhan (2026). Atlantic Anchor: Portugal in The Belt and Road Initiative. Janus.net, e-

journal of international relations, VOL. 17, Nº. 1, May 2026, pp. 248-264.

https://doi.org/10.26619/1647-7251.17.1.13

Article submitted on 15 May 2025 and accepted on 16 January 2026.

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ATLANTIC ANCHOR: PORTUGAL IN THE BELT AND ROAD

INITIATIVE

GÖKHAN TEKIR

Introduction

The Belt and Road Initiative (BRI) is one of the most ambitious connectivity projects in

the 21

century. The expansion of China’s BRI across Europe has raised significant

concern and debate, leading to a range of responses within the European Union (EU) and

among its member states. Academically, there has been growing interest in the

initiative's influence in Europe, with particular attention given to its role in Central and

Eastern Europe through platforms such as the 17+1 cooperation. However, there is still

limited scholarly focus on the relationship between Portugal and China within the context

of the BRI, especially in relation to Southern Europe more broadly (Ferreria-Ferreia &

Duarte, 2022: 218).

Portugal occupies a distinctive position within this evolving geoeconomic landscape.

Although it is a small state in terms of material capabilities, it possesses structural

advantages that make it attractive to China. These include its strategic Atlantic coastline,

deep seaports such as Sines, a vast exclusive economic zone, and a diplomatic tradition

shaped by longstanding engagement with both China and the United States (U.S.).

Historical ties rooted in the Macau connection, a reputation for pragmatic diplomacy, and

a long record of openness to foreign investment have further facilitated the entry of

Chinese firms. As a result, China has acquired significant stakes in Portugal’s energy

sector, financial institutions, and logistics networks, integrating the country into its

expanding presence in Western Europe.

These developments have taken place in a wider strategic context. The U.S. has

expressed growing concern that Chinese influence in critical infrastructure may create

vulnerabilities for the security of a NATO ally. Washington’s warnings regarding Huawei

and the future of 5G telecommunications, along with its interest in the Port of Sines as a

potential hub for LNG, show how Portugal has become entangled in overlapping strategic

agendas. Simultaneously, the EU has introduced stronger investment screening

mechanisms and digital security regulations, encouraging member states such as

Portugal to adjust earlier policies of openness toward Chinese capital.

Portugal, thus, has become an area in which great power competition takes place. Rather

than acting as a passive recipient of great power competition, Portugal attempts to

balance these external constraints with its own economic priorities. The country’s

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evolving approach to the BRI reflects a pattern of small state strategy that seeks to

secure investment, when possible, preserve flexibility through selective connectivity, and

rely on the EU and NATO frameworks to manage political and security risks. Existing

literature has primarily focused on Southern European BRI engagement through

Mediterranean ports such as Piraeus, while Portugal’s Atlantic position remains

underexplored. This study contributes to the literature by conceptualizing Portugal not

merely as a recipient of Chinese investment but as a strategic node that actively

leverages geoeconomic competition to enhance its agency.

This article argues that Portugal’s engagement with the BRI demonstrates how small

states navigate great power geoeconomic competition through a combination of selective

openness, regulatory adjustment and calibrated hedging. Portugal neither fully aligns

with China nor disengages under Western pressure. Instead, it manages competing

expectations by exploiting its strategic maritime position, institutional affiliations with the

EU and NATO, and long-standing diplomatic ties with Beijing. In doing so, Portugal

challenges traditional assumptions that small states rely primarily on patronage or

institutional sheltering. The Portuguese case shows that small-state agency is often

exercised through flexible, sector-specific strategies that enable autonomy even under

conditions of asymmetric dependence.

Geoeconomics and Small States

Geoeconomics refers to the use of economic instruments such as investment,

infrastructure, finance and technology for strategic purposes. It combines the logic of

conflict with the methods of commercial interaction (Luttwak, 1990, p. 19). As a foreign

policy strategy, geoeconomics involves using economic tools to pursue strategic goals,

presenting an alternative to traditional military-based power politics. It represents a form

of power projection carried out through economic means. Geoeconomics also carries a

geographical aspect, as it often operates through critical economic corridors that

establish and enhance connectivity (Scholvin & Wigell, 2018, pp. 4–5). Economic

linkages function as instruments of geoeconomic strategy. Major global economic

networks often concentrate power in a few central hubs, forming a hub-and-spoke

structure. Economic interdependence produces two key forms of power: market power,

derived from a state's economic scale, and bilateral dependence, where countries rely on

specific goods or partners. Only actors that control these central hubs can effectively

exploit interdependence as a strategic tool (Farrell & Newman, 2019, p. 52).

This networked structure has important implications for small states. Small states have

been defined in various ways, including their geographic size, population and degree of

international influence. Literature often distinguishes between microstates with very

small populations, highly developed European small states, and politically or economically

constrained states in Africa, Asia and Latin America. The challenge with this tripartite

classification is that most conclusions about foreign policy behavior are drawn within each

category rather than across them, which limits efforts to develop a general theory of

small-state behavior (Hey, 2003, p. 2). Beyond physical indicators, there is also a

psychological dimension. Keohane (1969, p. 296) offered this conceptualization: “A small

power is a state whose leaders consider that it can never, acting alone or in a small

group, make a significant impact on the system.” They acquire diplomatic influence

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through the multilateral processes of international organizations, especially through the

equal-vote decision rules that characterize many of these institution small states gain

diplomatic power through international system’s multilateral processes (Maass, 2017, p.

152). Their foreign policy behavior relies primarily on diplomatic engagement, legal

instruments and economic tools, since they lack the military capacity to project force

(Pinto, 2014, p. 393). The strategic orientation of small states reflects a broader

structural logic in which they emphasize international law, institutional norms and

cooperative principles to compensate for limited material capabilities and preserve room

for autonomous action within asymmetrical geoeconomic networks. Although they cannot

shape the overall structure of global economic systems, small states can exert influence

through control of specific nodes such as ports, data routes or regulatory gateways.

Assets embedded in global networks therefore become important sources of leverage,

particularly when a state occupies a valuable geographic position or hosts infrastructures

that intersect with major corridors of trade and energy.

Portugal illustrates this dynamic. Despite modest material power, it possesses a maritime

domain that significantly enhances its geoeconomic relevance. Portugal has a coastline

of 942 square kilometers. Including its islands, the country has an Exclusive Economic

Zone (EEZ) of 1.72 million square kilometers, making it the third largest EEZ in the EU.

If extended to the limits of the Portuguese continental shelf, this would add 3.88 million

square kilometers, 20 times the size of Portugal's land area, making it the 11th largest

EEZ globally. Combining the EEZ with the extended continental shelf would increase

Portugal’s maritime territory from 18 to 40 times its land area, roughly equivalent to the

size of India (Silva & Pereira, 2019, p. 401). This vast oceanic space increases Portugal’s

economic and strategic significance far beyond its territorial size

The Port of Sines adds further weight to Portugal’s position. The Port of Sines, located 58

nautical miles south of Lisbon, is Portugal’s only deep-sea port, capable of handling large

vessels with depths up to 28 meters. Positioned at the convergence of major global

shipping routes such as the transatlantic, Mediterranean, and Cape passages, the Port of

Sines has historically held strategic maritime significance. This importance has been

further reinforced by the 2016 expansion of the Panama Canal, which significantly

increased global cargo capacity and highlighted Sines as the nearest deepwater port in

Europe to this critical transoceanic corridor (Wejchert, 2021). These geographical and

infrastructural attributes make Portugal a notable node within broader geoeconomic

networks, illustrating how a small state can derive influence from strategically positioned

assets. China’s expanding BRI has created a new strategic context that elevates the

importance of the Port of Sines and enhances Portugal’s overall geoeconomic relevance.

The BRI as a Geoeconomic Design

Although officially framed as a cooperative development initiative, the BRI functions as

an instrument of economic statecraft through which China advances strategic objectives.

China possesses the required economic capacity to finance large-scale infrastructure

projects, positioning itself as the principal investor across Eurasia and Africa (Kostecka-

Tomaszewska & Krukowska, 2020, p. 275). The initiative operates through dual logic.

Domestically, it seeks to integrate China’s western provinces into transnational trade

corridors and mitigate internal developmental asymmetries. Externally, it expands

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Chinese presence across transport, energy and financial infrastructures, projecting

influence through economic embeddedness rather than territorial control. In this sense,

the BRI reflects a geoeconomic strategy in which infrastructure functions as both growth

mechanism and geopolitical instrument (Poon et al., 2024, p. 2).

The initiative’s digital component further extends this logic. Through the export of 5G

systems, fiber networks and digital platforms, Chinese firms promote technological

ecosystems that complement physical corridors. This digital layer deepens

interdependence while embedding Chinese standards within critical data infrastructures,

reinforcing the BRI’s broader geoeconomic design (Casagrande & Dallago, 2025, p. 4;

Tekir, 2020, p. 122).

Europe has become a central arena for China’s geoeconomic expansion. Through state-

linked enterprises, Beijing has acquired stakes in ports, utilities, financial institutions and

logistics networks, embedding itself within critical European infrastructure (Kostecka-

Tomaszewska & Krukowska, 2020, p. 271). These investments generate not only

commercial partnerships but also structural forms of influence rooted in asymmetric

interdependence. While major economies such as Germany, Italy and the United

Kingdom have absorbed substantial inflows of Chinese capital, Southern and peripheral

member states including Hungary and Greece have experienced more concentrated

exposure. This uneven distribution has enabled China to cultivate bilateral leverage

within the European Union, complicating the formation of a unified European response

(Amighini, 2018, p. 265). The expanding presence of Chinese firms in European ports

further reinforces this pattern by linking maritime infrastructure to broader networks of

political and economic influence (Martin et al., 2024, p. 6). Container traffic patterns

within Europe shifted after the global financial crisis, with Southern ports gaining relative

prominence in global shipping networks. Especially, Greece’s Piraeus port emerged as

the flagship BRI project in the Mediterranean (Kalkschmied & Stricker, 2025, p. 3). This

structural rebalancing, reinforced by changing trade routes and Chinese investment in

Mediterranean infrastructure, created new openings for Atlantic facing states. Within this

evolving maritime landscape, Portugal’s deep seaport capacity and extensive maritime

domain increased its geoeconomic relevance.

Portugal’s engagement with the BRI must therefore be understood within this broader

restructuring of European connectivity. As a member of both the EU and NATO, Portugal

occupies a strategic intersection between European market integration and transatlantic

security commitments. Chinese investments in Portuguese energy, transport and digital

sectors extend beyond commercial exchange and reflect a calibrated strategy through

which Lisbon seeks to leverage geographic position while managing alliance-based

constraints. For Beijing, Portugal offers access to the EU single market and Atlantic

routes. For Lisbon, the BRI provides an opportunity to attract capital and reinforce its

role as an Atlantic gateway within Europe.

Portugal-China Relations

Portugal’s engagement with China within the BRI framework is rooted not only in

contemporary economic calculations but also in a long-standing historical relationship

that fostered bilateral trust. Portuguese presence in Macau from the sixteenth century

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until its negotiated handover in 1999 created a comparatively low conflict diplomatic

legacy, distinguishing Lisbon’s relationship with Beijing from more coercive colonial

experiences in Europe (Fernandes et al., 2022, p. 49). This historical continuity helped

create a diplomatic environment in which engagement with China remained

comparatively depoliticized and low conflict, a condition that small states often rely upon

to manage asymmetrical relationships.

These historical foundations acquired renewed significance during the global financial and

Eurozone crises, which severely constrained Portugal’s fiscal autonomy and limited its

access to international capital markets. Under these conditions of heightened

vulnerability, China’s acquisition of Portuguese sovereign bonds provided a critical source

of liquidity and signaled the deepening of bilateral economic ties. Since 2000, Portugal

has registered one of the most pronounced increases in Chinese capital inflows within

Europe (Arena, 2022, p. 4).

China emerged as a crucial source of financing by purchasing Portuguese sovereign bonds

at a moment when international markets had largely withdrawn. These interventions not

only provided liquidity but also marked the beginning of a broader phase of Chinese

economic embeddedness. Portugal subsequently became one of the European countries

registering the most significant growth in Chinese capital inflows since 2000 (Arena,

2022, p. 4). Between 2015 and 2019, Chinese investment in Portugal diversified

significantly beyond the energy sector, expanding into real estate, banking, health, and

well-being. Both state-owned and private Chinese entities became key actors in the

Portuguese market. Notably, the private conglomerate FOSUN acquired Luz Saúde,

following earlier investments in Fidelidade and Banco Comercial Português. Other

relevant developments included Bison Capital’s acquisition of BANIF in 2016, although

attempts by Anbang to purchase Novo Banco and by China Three Gorges to acquire EDP

ultimately failed. Despite these setbacks, Portugal became the first Eurozone country to

issue public debt in renminbi, reinforcing its strategy of positioning itself as a gateway

for Chinese investment in Europe. Financial integration also progressed through

Millennium BCP’s issuance of UnionPay credit cards. In the energy sector, China Triumph

International Engineering invested €200 million in a major solar power project in

Alcoutim, while the launch of a blue partnership in 2017 further deepened bilateral

cooperation in maritime affairs. Meanwhile, Chinese investment in real estate included

large-scale projects in Oeiras, Monsanto, and Estremoz, reflecting a broader strategy of

long-term economic engagement and strategic positioning within the Portuguese

economy (Ferreria-Ferreia & Duarte, 2022, pp. 224–225).

This phase of economic penetration coincided with institutional measures that facilitated

capital inflows. The center right government led by Passos Coelho introduced the Golden

Visa program, which attracted significant Chinese participation, while the subsequent

Socialist government adopted a more explicitly supportive stance toward BRI cooperation

(Silva et al., 2023, p. 161).

In an effort to boost its position in the globalized economy, Portugal has also sought to

involve China in its Atlantic maritime initiatives, particularly in the capital-scarce blue

economy sector. In 2016, a Memorandum of Understanding was signed between the

Chinese Oceanic State Administration and the Portuguese Ministry of the Sea to promote

cooperation in scientific research and commercial projects. That same year, collaboration

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with the University of the Azores was proposed for joint studies on mineral exploration.

This partnership advanced further in 2017 with the signing of an Action Plan during a

Portuguese business mission to China (Silva & Pereira, 2019, pp. 402–403). These

common interests have strengthened Portugal–China relations in the context of the BRI.

These cumulative developments laid the groundwork for the formalization of cooperation

under the BRI. During President Xi’s 2018 visit to Portugal, the two countries signed a

Memorandum of Understanding, which formalized Portugal’s engagement with the BRI.

Within the BRI framework, Portugal and China committed to advancing cooperation by

utilizing bilateral and multilateral platforms, including major development banks and the

EU–China Connectivity Platform, to generate strategic complementarity. The MoU

articulates seven principal domains of collaboration. Policy coordination serves as the

overarching mechanism for aligning national strategies. Transport, logistics and port

infrastructure constitute a second area, with particular emphasis on the Port of Sines,

the future Vasco da Gama terminal, and the reinforcement of maritime, rail and air

connectivity. A third domain concerns the expansion of two-way trade and investment,

including coordinated engagement in third-country markets, especially those in the

Lusophone community. Energy cooperation forms the fourth area, centered on renewable

integration, smart electricity transmission and advanced grid management. The fifth

domain promotes industrial and technological collaboration, notably in electric mobility

and intermodal transport solutions linked to the Trans-European Transport Network.

Financial cooperation represents the sixth area, encouraging institutional support for joint

projects and deeper dialogue between monetary and regulatory authorities. Finally,

people-to-people connectivity constitutes the seventh domain, encompassing education,

cultural exchange, tourism, public health collaboration and strengthened interaction

among local governments, media, think tanks and youth (Figueiredo, 2019, pp. 8–11).

These developments reflect an interaction that is simultaneously pragmatic and

geoeconomic. For Portugal, Chinese capital expanded policy flexibility under fiscal

constraint. For China, investment in Portugal secured strategic access to a Western

European economy embedded within EU and transatlantic structures. This logic of

economic embeddedness becomes particularly visible in the case of the Port of Sines,

where infrastructure, geography and great power competition converge.

The Port of Sines

China considers the Port of Sines a major geoeconomic asset within the BRI due to its

potential to connect the initiative’s overland and maritime routes. Sines is positioned at

the westernmost point of the New Eurasia Land Bridge Economic Corridor, which is the

longest and most ambitious of the BRI’s six economic corridors. At the same time, it

offers a strategic location on the Atlantic, aligning with the objectives of the 21st-Century

Maritime Silk Road. Analysts from China’s National Marine Information Centre highlight

that Sines could serve as an Atlantic entry point for BRI trade into Europe and function

as a platform for the export of European goods to Latin America and North Africa. This

would allow Sines to become a central axis for BRI operations in Europe and support the

launch of additional infrastructure projects. They argue that China should invest in both

the development and long-term management of the port (Wejchert, 2021).

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Although there is no direct Chinese involvement in the Port of Sines, Portugal was the

first member state of the EU to establish a “Blue Partnership” with the People’s Republic

of China. At the International Conference on Portugal-China Cooperation held in Lisbon

in December 2021, Chinese and Portuguese officials emphasized their countries' ongoing

collaboration in marine protection, biodiversity, and pollution control, alongside growing

academic exchanges aimed at advancing the blue economy. While scientific and

technological cooperation is already in place, Portuguese authorities noted that further

progress is possible. Two key frameworks offer new opportunities for Chinese

investment: the Sea National Strategy 2021–2030 and the Recovery and Resilience Plan,

which includes a Sea Component envisioning a Blue Hub with infrastructure and

technology clusters across several coastal regions. Future cooperation could expand into

emerging fields such as blue biotechnology, ocean renewable energy, aquaculture, and

fisheries (Silva et al., 2023, p. 164).

Portugal viewed Chinese engagement as an opportunity to elevate Sines into a major

trans-Atlantic logistics hub. The government had already been actively promoting the

port before the 2018 BRI memorandum, with Prime Minister Costa emphasizing

Portugal’s strategic role in connecting Europe and Asia through the new maritime routes.

Former Foreign Minister Santos Silva likewise stressed Portugal’s strong interest in the

BRI’s large-scale infrastructure financing and its willingness to place Sines within the

emerging Maritime Silk Road. If Chinese interest did not materialize, Lisbon expected

that the U.S. might step in, given Sines’ advantageous position for LNG exports to Europe

(Arena, 2022, pp. 10–11).

This dual interest has increasingly drawn the U.S. into the competition over Sines. The

US shale boom had created a geopolitical opportunity to expand gas exports to allies and

lessen their reliance on suppliers such as Russia and North Africa. Sines, as the closest

European deepwater port to US shale basins, offers a natural entry point for American

LNG, yet only about one third of US LNG bound for Europe currently uses the port,

suggesting significant room for growth if its capacity is expanded. Since 2016, the EU

has already become one of the largest buyers of US LNG (Wejchert, 2021). Within these

interests, the Trump administration urged Portugal to align Sines’ development with US

infrastructure preferences US Ambassador to Portugal Geoge Glass called the project a

step toward making Portugal the "Singapore of the West." However, Portuguese officials

pushed back, rejecting U.S. interference while affirming both their alliance with

Washington and economically driven ties with China (Horta, 2021).

Portugal has sought to leverage the geoeconomic competition among major powers to

raise the profile of the Port of Sines. Pedro do Ó Ramos, President of APS, explained that

the revised investment strategy for Sines focuses on expanding capacity and improving

connectivity. Preparatory work for the Vasco da Gama Terminal and upgraded links to

Terminal XXI form the core of this plan. Two studies on new road and rail access are

being approved to advance key infrastructure, including a second railway line on the

port’s eastern side to provide redundancy and direct connections to both terminals, along

with new road links. The intraport network will also be modernized through improved

access to the multipurpose terminal and marina. Ramos emphasized the importance of

strengthening the port’s reach into the Iberian hinterland, noting that the Évora–Elvas

railway section, expected in early 2026, will cut travel time to Madrid by more than three

hours and enable Sines to compete more effectively with Valencia (PortsEurope, 2025).

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To attract global investment, the government launched an international tender for the

€640 million Vasco da Gama Terminal, to be developed through a public–private

partnership. Chinese companies, including COSCO, have reportedly expressed interest in

the project (Wejchert, 2021).

Simultaneously, the European Commission (EC) also supports projects to strengthen

Iberian energy integration, including compressor stations and cross-border pipelines such

as TRA N 285, TRA N 283, and the Guitiriz Zamora Adradas line, which aim to connect

Iberia with France. Although the MidCat gas interconnector is an EU priority, its

development has stalled due to cost concerns. A future connection from Sines to

Barcelona via Huelva, Cordoba, or Badajoz, already linked to Portuguese gas storage,

could improve regional energy flow. With its strategic Atlantic location, Sines is well

positioned to become a key LNG entry point for Europe and a hub for LNG powered

maritime traffic (Silvestre, 2020).

Amid this convergence of geoeconomic interests, the EU’s regulatory response has

become increasingly relevant. EU Framework for Screening of Foreign Direct Investment,

which promulgated in 2019 and entered into force in 2020, provides a cooperation

mechanism between the EC and member states regarding critical infrastructure, critical

technologies or critical inputs (Regulation (EU) 2019/452). While ultimate decision-

making authority remains with national governments, the framework is likely to shape

member states’ approaches toward Chinese involvement in strategic sectors such as

ports.

As a result of this development, Vasco de Gama Terminal, the real focus of the expansion

of the Port of Sines, remained underdeveloped. This reflects Portugal’s attempt to balance

the competing expectations of China, the U.S., and the EU without committing to any

single actor. For a small state, connectivity can generate strategic opportunities, yet

great-power rivalry simultaneously may narrow the room for maneuvering. Given Sines’

importance for Chinese maritime ambitions, US energy strategy, and EU connectivity

plans, Portugal’s caution appears designed to preserve diplomatic flexibility and protect

its strategic autonomy.

Portugal and Digital Silk Road

During Xi’s December 2018 visit to Lisbon, Huawei and Altice Portugal signed an MoU to

cooperate on the development and rollout of 5G services in the country. In 2019, Huawei

announced plans to open its first European 4G and 5G technical support center in Lisbon.

Portuguese telecom companies NOS and Altice partnered with Huawei to develop 5G

networks, with NOS launching the country’s first 5G network in Matosinhos in October

2019. This positioned NOS as a national leader in 5G innovation, supporting smart city

and research initiatives (Mendes & Wang, 2023, p. 139).

NIS 2 Directive enacted by the EU tightens cybersecurity requirements for member states

and calls for coordinated security risk assessments for 5G networks. Security risk

assessments of critical supply chains should consider both technical and non-technical

factors, such as those outlined in EU 5G cybersecurity guidelines. Key criteria include the

dependency of essential entities on specific ICT services or products, their role in

sensitive functions, the availability of alternatives, overall supply chain resilience, and

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risks linked to emerging technologies (Directive (EU) 2022/2555). Although Huawei has

not been specifically named, EU’s stringent laws are directly relevant to Huawei’s

participation in European countries’ 5G networks.

Then-Prime Minister António Costa acknowledged EU security concerns about Huawei but

stressed that Europe should not halt its digital modernization. Following the European

Parliament’s new investment-screening rules, he argued that closing the EU to foreign

capital was misguided and that Brussels should prioritize education and research instead.

During his April 2019 visit to China, Then-Foreign Minister Santos Silva noted that

Portugal would submit its 5G security assessment to the EU to determine whether any

companies should be excluded on national-security grounds. President Rebelo de Sousa,

implicitly addressing the Altice–Huawei agreement, emphasized that Portugal remained

free to choose any operator that met its security standards and saw no issue with Huawei

competing for 5G contracts despite external pressure (Arena, 2022, p. 9).

A more direct pressure came from the U.S. which considers Huawei as an agent of the

Chinese state. In 2019, President Trump signed an executive order which prohibited

Huawei in domestic use. On May 15, 2020, the U.S. Department of Commerce announced

plans to limit Huawei’s use of U.S. technology and software for designing and producing

semiconductors abroad. The U.S. also launched a worldwide campaign to block Huawei’s

5G ambitions. The ban on U.S. companies supplying Huawei with hardware and software

has significantly undermined the company (Mendes & Wang, 2023, p. 140). Portugal has

been subject to sustained diplomatic pressure from the U.S. to exclude Huawei from the

development of its 5G networks. In 2020, Ambassador Glass criticized Portugal for

permitting Chinese investments in key sectors like telecommunications and energy. He

cautioned that allowing Huawei into the country's 5G network could seriously impact

U.S.–Portugal security ties (Horta, 2021).

This diplomatic pressure appears to have influenced subsequent policy decisions. In May

2023, Portugal’s Cybersecurity Council (CSSC) issued a resolution effectively barring the

use of products from Chinese companies in the country’s 5G and related 4G networks.

Despite additional costs, Altice Portugal has chosen Nokia to supply its 5G core network

infrastructure, replacing Huawei (Lipscombe, 2023).

Portugal’s experience with Huawei and 5G reflects the interaction between small-state

diplomacy and the pressures of geoeconomic competition. In the early phase, Lisbon

adopted a hedging strategy that sought to maximize economic opportunities created by

China’s technological expansion. Cooperation agreements with Huawei, the prospect of

a technical support center in Lisbon, and early 5G trials allowed Portugal to attract

investment, upgrade infrastructure, and position itself within emerging digital value

chains. This behavior is consistent with the logic of small states that try to enhance

national autonomy by leveraging external economic flows. Yet as the EU strengthened

its cybersecurity regime through the NIS2 Directive and the U.S. framed 5G

infrastructure as a strategic arena linked to national security, Portugal’s room for

maneuver contracted. The geoeconomic environment shifted from opportunity to

constraint. Regulatory obligations and alliance expectations became more important than

the commercial gains offered by Huawei. The 2023 Cybersecurity Council decision and

Altice Portugal’s later selection of Nokia reveal how a small state, when confronted with

hardening geopolitical rivalries, adjusts its position to remain aligned with its core

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institutional and security partners. Portugal’s trajectory shows that small states can

exploit geoeconomic openings during calm periods in the international system, but when

major-power competition intensifies they often prioritize political and security alignment

over purely economic calculations, even when this choice involves significant financial

costs.

Portugal’s Evolving China Policy

Since 2023, Portugal has not only canceled its contracts with Huawei but has also begun

reassessing its involvement in the BRI, citing China’s support for Russia in the Ukraine

war as a main factor (Sheridan, 2023). These decisions signaled a broader shift in

Portugal’s strategic posture, reflecting growing alignment with EU and transatlantic

security concerns and increasing caution toward Chinese technological and infrastructural

engagement.

At the same time, friction has emerged in other domains of bilateral relationships. China

initially excluded Portuguese passport holders from its visa-waiver program for short-

term travel, despite including nationals from 11 other European countries. The parallel

exclusion of the United Kingdom prompted speculation that Portugal’s omission may have

been a retaliatory response to its effective ban on Huawei equipment in national 5G

networks (The Macao News, 2024). Yet this diplomatic signal was relatively short-lived.

On 30 September 2024, Chinese authorities announced that Portugal would be added to

the visa-exemption scheme, allowing stays of up to 15 days for tourism, business, family

visits, and transit (Consular General of Portugal in Guangzhou, 2024). This shift indicates

a more conciliatory stance by Beijing, suggesting a strategic recalibration aimed at

preserving bilateral relations despite ongoing tensions over technology and security.

Portugal remains the only Western European state still formally participating in China’s

BRI. Confronted with declining U.S.-bound exports due to Trump-era tariffs, Lisbon has

sought to strengthen commercial ties with China even as the EU criticizes Beijing for

market distortions and its support for Russia’s war economy. This engagement with

Beijing illustrates a hedging strategy in which Portugal seeks to balance geopolitical

commitments with the material benefits of Chinese investment. This behavior

underscores how small states navigate asymmetric environments by adjusting relations

rather than choosing definitive sides.

Conclusion

Portugal’s experience with the BRI illustrates how a small Western state can navigate an

environment shaped by intensifying geoeconomic rivalry among China, the EU and the

U.S. while attempting to preserve strategic autonomy. As this study demonstrates,

Portugal’s choices cannot be reduced to a simple narrative of alignment or

disengagement from China. Instead, the Portuguese trajectory reflects a pattern of

selective engagement, careful hedging and regulatory adaptation. These strategies are

shaped by the interaction between structural pressures and the opportunities created by

Portugal’s maritime geography, institutional position and longstanding diplomatic ties

with China. The case therefore reinforces the broader argument that small states are

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neither passive recipients of great power competition nor entirely autonomous actors.

Rather, they operate within fluctuating opportunity structures that enable limited but

meaningful forms of agency.

The historical dimension of Portugal’s relationship with China is central to understanding

its early confidence in pursuing deeper economic ties. Centuries of interaction,

culminating in the peaceful handover of Macau in 1999, generated a degree of bilateral

trust that is unusual within Europe. This historical foundation helped make Portugal

relatively receptive to Chinese investment at a time when it faced severe fiscal pressure

during the Eurozone crisis. Chinese purchases of Portuguese sovereign bonds, followed

by significant investments in energy, real estate, telecommunications and financial

services, provided Lisbon with an important alternative source of liquidity during a

moment when access to global markets was constrained. These developments highlight

a central feature of small state strategy. Smaller states commonly use diversified

economic partnerships to expand their policy autonomy when confronted with structural

vulnerabilities and limited domestic resources.

Portugal opened its economy to Chinese capital, and it participated in China-led BRI.

However, as both the EU and the U.S. reoriented their approaches to China, Portugal’s

geoeconomic space began to narrow. The evolving debate around Huawei illustrates this

shift clearly. Portugal’s initial enthusiasm for cooperation with Huawei in the development

of fifth generation telecommunications reflected a period in which Lisbon sought to

capture the economic benefits associated with emerging digital value chains. Over time,

however, European cybersecurity regulation became more stringent and the U.S.

pressure grew more explicit. This produced an environment in which the commercial

appeal of Huawei conflicted with Portugal’s obligations to its principal allies. The eventual

decision in 2023 by the Cybersecurity Council to effectively exclude Huawei from national

networks shows how small states adjust their posture when economic incentives collide

with alliance expectations and when broader geopolitical tensions raise the perceived

risks of technological dependence.

The contestation over the Port of Sines further illustrates this complex interplay. Through

the maritime dimension of the BRI China viewed the port of Sines as a strategically

located Atlantic gateway that could integrate European markets into wider logistics and

energy networks. The U.S., by contrast, saw the port of Sines as an important potential

hub for liquefied natural gas exports that could reduce European dependence on Russian

energy. The EU approached the port primarily through regulatory mechanisms that

emphasize critical infrastructure protection and energy security. Portugal attempted to

position itself within this triangle of interests and sought to use the competing

preferences of the major powers to attract investment and promote the development of

the port of Sines. Yet the divergent expectations governing Chinese, European and

American interests constrained Portugal’s decision space. The slow progress of the Vasco

da Gama terminal demonstrates how small states often face delays or policy paralysis

when they attempt to avoid appearing overly aligned with any particular great power.

This case reinforces the central insight of this study. Connectivity can provide important

opportunities for small states, but heightened geopolitical rivalry simultaneously reduces

their room for maneuver.

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Developments since 2023 in Portugal’s broader China policy continue to reveal the

adaptive nature of small state strategy. Lisbon’s cancellation of Huawei contracts and

reassessment of its participation in the BRI reflect the changing international

environment, particularly growing concerns about China’s alignment with Russia

following the invasion of Ukraine. Yet this shift has not resulted in Portugal’s

disengagement from China. Instead, Lisbon has demonstrated a continued willingness to

maintain diplomatic channels, develop commercial partnerships and express support for

multilateral governance formats that include China. Prime Minister Luis Montenegro’s

visit to Beijing in 2024, during which he reaffirmed the one China principle and expressed

interest in deepening bilateral cooperation, underscores this dual strategy. Portugal

remains responsive to European and American security concerns, but it also seeks to

preserve the economic benefits and diplomatic flexibility associated with continued

engagement with China. This behavior exemplifies hedging which is a strategy commonly

employed by small states to balance geopolitical commitments with economic

opportunities.

Portugal’s approach therefore reflects a distinctive pattern of small state agency. Lisbon

seeks to remain aligned with the EU and the NATO, as these institutions form the

foundation of its security and political identity. At the same time, it avoids foreclosing

avenues of cooperation with China, whose investments played a stabilizing role in earlier

periods of economic difficulty and still represent valuable opportunities for diversification.

This careful balancing act underscores the broader complexity of small state strategy in

an era in which economic and security considerations are increasingly intertwined. As

connectivity projects become instruments of geopolitical influence, small states face the

challenge of securing developmental benefits while avoiding the political risks associated

with deepening reliance on any single external actor.

The Portuguese example also contributes to theoretical debates concerning

geoeconomics and the behavior of small states under conditions of systemic rivalry. The

case shows that small states embedded in institutional environments such as the EU do

not exert agency by directly challenging great powers but by adjusting their economic

openness, regulatory posture and diplomatic messaging in response to changing

circumstances. Portugal’s strategy of controlled openness, regulatory precise adjustment

and diplomatic ambiguity exemplifies the tools through which small states navigate and

partially shape geoeconomic competition. Furthermore, Portugal’s extensive maritime

domain and strategically located port infrastructure illustrate how small states can

leverage geographic assets to gain relevance within global networks. These assets enable

them to attract the attention of major powers and expand their bargaining space, even

if they cannot reshape the broader system.

Ultimately, Portugal’s evolving relationship with China reveals both the possibilities and

the limits of small state agency in a contested geoeconomic order. Portugal cannot

completely sever economic ties with China without sacrificing important opportunities,

nor can it disregard the security expectations of its Western partners. Its behavior is

therefore characterized by cautious flexibility, selective alignment and continual

recalibration. These strategies allow Portugal to extract benefits from multiple

geoeconomic spheres while mitigating the risks associated with deepening geopolitical

polarization. As competition between China, the EU and the U.S. intensifies, the

Portuguese case shows that the future of the BRI in Western Europe will depend not only

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on the strategic vision of major powers but also on the decisions of small states that

occupy critical nodes in global connectivity.

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