cosco shipping

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German Chancellor Tries to Quell Dispute Over Port Deal with China’s COSCO

Bloomberg
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October 21, 2022

By Arne Delfs and Birgit Jennen (Bloomberg) —

German Chancellor Olaf Scholz denied reports that he has already reached a decision over the disputed sale of a stake in a Hamburg container terminal to China’s state-owned shipping conglomerate Cosco Shipping Holdings Co.

“Nothing has been decided yet, and many questions still need to be addressed,” Scholz told reporters in Brussels on Friday about the possible deal. He made clear that the Chinese state company didn’t intend to buy the whole Hamburg port, but only a minority stake in one of Hamburg’s four container terminals.

The chancellor so far hasn’t put the deal up for discussion in the cabinet and reports that Scholz is leaning toward giving a green light for the deal has provoked a dispute within his coalition, a person familiar with the matter said on the condition of anonymity. The next cabinet session will be on Wednesday, which would be the last opportunity to do so before the deal gets approved. 

According to Germany’s trade law, the government needs to voice opposition to any planned foreign invest deal within four months after its announcement. Failure to do so results in approval, and the deadline for the Cosco deal is next week. 

‘Blackmail’ Danger

German Economy Minister Robert Habeck opposes the planned purchase — together with his colleagues from the ministries of foreign affairs, finance, defense and interior — arguing that the Hamburg port is part of the country’s critical infrastructure. Habeck is currently lobbying for an extension of this deadline in order to enable a discussion within government, the person said.

Habeck didn’t want to comment directly on the matter on Friday, but pointed to the danger of getting too dependent on a country like China. 

“We have learned that dependencies from countries which then might use their own interests in order to blackmail us are no longer just an abstract phenomenon,” he said in Hamburg with regard to Germany’s reliance on Russian gas imports. “We shouldn’t repeat these mistakes.” 

Scholz, who was Mayor of Hamburg from 2011 to 2018, still has close ties to the SPD-led government of the port city. He is planning to visit China on Nov. 4, according to people familiar with his plans. The German government hasn’t confirmed the travel. 

In a recent dispute over the extension of nuclear power in Germany, Scholz used his authority as chancellor to push through an extension until April against Habeck’s will.

–With assistance from Michael Nienaber.

© 2022 Bloomberg L.P.

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