Portugal Open to China Investment in Azores as U.S. Sway Wanes

  • Premier speaks of Atlantic islands in Bloomberg TV interview
  • U.S. scaling back military presence at Lajes Field air base

Portuguese Prime Minister on Chinese Investment

Portugal is welcoming non-military Chinese engagement in the Azores to help develop the logistical and research potential of the mid-Atlantic island chain.

The growing Chinese influence on the archipelago is worrying Washington as the U.S. reduces its military presence at the Lajes Field air base on the island of Terceira. A series of senior Chinese officials -- including President Xi Jinping and Premier Li Keqiang -- have used the island as a stop-over on trips to Latin America, as China seeks to expand its footprint overseas and safeguard economic interests.

Antonio Costa, Portugal's prime minister. Photographer: Anthony Kwan/Bloomberg

Antonio Costa, Portugal's prime minister.

Photographer: Anthony Kwan/Bloomberg

In a Bloomberg Television interview in Macau on Tuesday, Portuguese Prime Minister Antonio Costa said that while his nation -- a NATO member -- would continue to honor its defense pact with the U.S., he also wants to see better use of the Azores. The islands are “very important both logistically in the Atlantic Ocean but also in terms of technology and research, in the field of climate change and deep water research,” he said.

For video of Costa discussing Chinese investment, click here

“The military use of the American base at this moment is not on the table, what is on the table is for EU institutes, American institutes and Chinese institutes to reuse infrastructure for scientific research purposes,” said Costa, 55. “It’d be a huge waste not to use that infrastructure. We need to reuse that infrastructure, and if you are not going to use it for the military purpose, why not scientific research?”

Lajes Field -- located 2,290 miles (3,690 kilometers) east of New York and about 1,000 miles west of Lisbon -- had served as a key link between the U.S. and its allies in the North Atlantic Treaty Organization and the Middle East. During the Cold War, the base played a crucial role in tracking Soviet guided missiles and ballistic missile submarines in the region. It also supported U.S. airlift missions to Israel in the 1970s.

The U.S. planned to cut its military presence at Lajes to under 170 active duty personnel after the global economic crisis, in a move that is hurting the local economy. The down-scaling is also seen by Pentagon hawks as strategically precarious.

In a Sept. 20 letter to U.S. Secretary of Defense Ashton Carter, Devin Nunes, the Republican chairman of the House Permanent Select Committee on Intelligence, sounded a warning on China’s ambitions in the mid-Atlantic.

“China has spread its influence through similar infrastructure investments in Djibouti, Sri Lanka, and elsewhere around the globe,” Nunes wrote. “It is now using the same tactics to establish a foothold in the Azores which, if successful, will be used for a logistics and intelligence hub that could ultimately be expanded for other military purposes, adjacent to critical U.S. military facilities.”

China’s Reach

China has dramatically expanded its global reach in recent years as it seeks energy supplies and raw materials to fuel economic growth. Chinese businesses eager to diversify their export markets have also fanned out looking for new customers in places like Africa, Latin American and the Middle East.

Terceira, the island that hosts the Lajes base, appears to be part of that strategy. Premier Li made a two-day “technical stop” there on his return from Cuba two weeks ago, and President Xi stopped there in July 2014 on the way back from a trip to South America. In June, China’s top maritime official, State Oceanic Administration chief Wang Hong, visited the Azores.

Neither Beijing nor Lisbon has elaborated on the apparent Chinese interest in the island.

After meeting Barack Obama during a NATO Summit in Warsaw in July, Costa said he handed the U.S. president a summary of work done toward turning the Azores into a research platform. The Portuguese government is also working to establish an international science research center on the island chain.

In Tuesday’s interview, Costa said of the Azores: "We’re open to cooperation with all partners, including China, to work in deep-water technology and research,” especially in the fields of paleontology and volcanology.

Portugal Investment

While U.S. influence there dwindles, China has invested heavily in Portugal. The Western European nation has become China’s fifth-biggest investment destination in Europe, and, according to official figures, total Chinese investment reached more than $7 billion by the end of last year.

Costa said that his country feels very comfortable with the “positive” Chinese investment, and would like to strengthen the partnership.

“Portugal has opportunities and China has the investment capacity, together they can do more than they can do separately, both in Europe and in the Portuguese-speaking world,” Costa said. “China knows us, and has known us for many centuries, and they know we’re a loyal and trustworthy partner.”

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