HEDGING UNDER PRESSURE: PORTUGAL’S FOREIGN POLICY AND THE U.S-CHINA RIVALRY

Abstract

This study aims to analyse Portugal's position within the Sino-American rivalry, charting its evolution in the context of a ‘golden era’ of Chinese investment amid a financial crisis and a perceived (partial) abandonment by the United States, Portugal’s traditional great-power ally. For a small European state, a member of the European Union and NATO, the central challenge lies in balancing long-standing transatlantic commitments with the economic opportunities offered by China. The fracture between the Global South and the institutional commitments to the EU and the U.S during the Trump era has necessitated subtle political manoeuvring. We argue that Portugal’s behaviour towards China from the 2008 financial and economic crisis to 2019 constitutes a case of ‘hedging’ and consider the question of whether this was the result of a strategy or an ad hoc search for new foreign partnerships. We conclude that while hedging occurred and that there is some indication of strategic thought from Lisbon policymakers, in practice it was always cautious and the country continued to prioritise alignment with the EU and the U.S.. Historical commitments, the liberal democratic legacy, shared values, defence alliances, and the collective European project place Portugal generally closer to this political framework, which tends to constrain its relations with Beijing, without precluding occasional cooperation. However, we also find indications that Portugal’s hedging has had a strategic dimension. This question warrants consideration because it is still ongoing: Within the current international framework, does Portugal continue to pursue a hedging strategy toward China, or has it embarked on a gradual and deliberate disengagement from political relations with Beijing?