Port of Hamburg: Controversial deal with China is coming – “emergency solution”

Created: 10/25/2022, 12:10 p.m

By: Lisa Mayerhofer

Can a Chinese company invest in a container terminal in the port of Hamburg?

A compromise is now in the offing for this dispute - in government circles there is talk of an "emergency solution".

Hamburg – A report has also caused heated debates within the federal government in the past few days.

The Chinese Cosco Group wants to take a stake in a port terminal in Hamburg and is thus gaining influence over part of the critical German infrastructure.

Compromise in the controversial Hamburg port deal with China in sight

A compromise is now emerging in the dispute within the federal government.

According to this, Cosco may participate in the terminal – but only with a smaller share.

The Chinese group should not be able to take over 35 percent of the Tollerort terminal as planned, but only 24.9 percent.

According to information from government circles, the federal government departments involved see a limit of 24.9 percent as an “emergency solution” at best.

This is to prevent worse things from happening, namely that Cosco would get a 35 percent stake as originally planned, as well as a managing director and rights of objection.

A complete ban is still considered the right way, the departments have made it clear.

It is becoming apparent, however, that a decision on a complete ban on participation in the cabinet cannot be reached because the Chancellery has not put it on the agenda, it said.

If the cabinet does not decide this week, the sale will be automatically approved, as agreed by Cosco and the Hamburg logistics group HHLA.

It is important to prevent this.

Cosco wants to make the port of Hamburg the preferred transhipment point

In September 2021, HHLA and the Chinese terminal operator Cosco Shipping Ports Limited agreed on a 35 percent Chinese stake in the HHLA Terminal Tollerort (CTT) in the Hanseatic city.

The Cosco Group also operates the world's fourth-largest shipping company, whose container ships have been handled by HHLA at the CTT for 40 years.

In return for the stake, Cosco wants to make the CTT a preferred transhipment point in Europe.

However, under the impression of recent experiences with Russia and the dependence on its gas supplies, a dispute broke out within the federal government over the question of whether Chinese participation should be allowed.

It was actually the line of the Ministry of Economics and other ministries to prohibit the business, citing security risks.

However, according to media reports, the Chancellery was pushing for the entry to take place.

Chancellor Olaf Scholz (SPD) recently emphasized that nothing had been decided yet and that many questions still had to be clarified.

He also pointed out that it was not about selling the port.

It is about a stake in a terminal, as is the case in some western European ports.

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China participation in the port of Hamburg: Experts and politicians are still critical of the deal

According to dpa information, the compromise solution that has now been reached should have been coordinated with the Chinese side.

At the Hamburg port logistics company HHLA, it is assumed that the Chinese will support the compromise solution, according to company circles on Tuesday.

During the talks with the federal government there has always been feedback with Cosco in the past few days.

Experts and politicians are still critical of the deal.

The China Institute Merics also warned of risks.

Analyst Jacob Gunter told the German Press Agency in Berlin: "Cosco and its investment in the Port of Hamburg pose various risks to the security and economic interests of Germany." Cosco is not just another multinational company simply looking for a return - but an instrument of the Chinese government to advance its strategic goals.

The more dependent Germany becomes on investments and deals with Cosco, the more influence Cosco and party officials can have on German China policy.

The Green foreign politician Anton Hofreiter also rejected a Chinese participation of 24.9 percent.

China would have "much less influence" than with a share of 35 percent.

"But it would still be critical, because we would still have a dictatorial regime that buys infrastructure from us with the help of state-owned companies," Hofreiter said on Tuesday in the ARD morning magazine.