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Hamburg Port Sale To China Unleashes Protest

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October 26, 2022

While NATO and most of the international defense community – including US Secretary of Defense Lloyd Austin and US Transportation Command General Van Ovost who use ports like Bremerhaven and Hamburg to support about 35,000 American troops stationed in Germany – remain puzzlingly silent about the sale of this critical port to China, some German politicians worried about national security have begun to protest.

By Andreas Rinke (Reuters) – The German cabinet allowed China’s Cosco to buy a stake in a terminal in the country’s largest port on Wednesday in a decision pushed through by Chancellor Olaf Scholz that triggered unprecedented protest within the governing coalition.

With the support of Scholz’s Social Democrat-led ministries, the cabinet approved a 24.9% stake investment by Cosco in one of logistics firm HHLA’s three terminals in the Hamburg port.

The approved investment is less than the initially planned 35% stake that the Chinese shipping giant and HHLA had aimed for and does not give Cosco any say in management or strategic decisions. 

But the painful experience of being too dependent on Russian gas has changed many politicians’ attitude towards strategic foreign investment. The foreign ministry was so upset over the approval that it drew up a note on the cabinet meeting documenting its rejection, Reuters was told by two government sources.

The investment “disproportionately expands China’s strategic influence on German and European transport infrastructure as well as Germany’s dependence on China,” the document, seen by Reuters, says. It points to “considerable risks that arise when elements of the European transport infrastructure are influenced and controlled by China – while China itself does not allow Germany to participate in Chinese ports.”

In the event of a crisis, the acquisition would open up the possibility for China to politically instrumentalise part of Germany’s as well as Europe’s critical infrastructure, it says. The economy ministry and the four ministries led by the liberal Free Democrats joined in drawing up the note, according to the sources.

Scholz, a former mayor of Hamburg, has once again asserted his will against his coalition partners, the Greens and the Free Democrats. After pushing through a nuclear power extension single-handedly last week, the Cosco move fuels discord at home and among European allies who are against the Chinese investment and already see Scholz as increasingly isolated.

Scholz is scheduled to travel to China next week. 

HHLA Welcomes The Payoff

HHLA, which is majority-owned by the city of Hamburg and one of the main users of the port, welcomed the deal.

“We appreciate that a solution has been found in objective and constructive talks with the federal government,” said Angela Titzrath, chairwoman of HHLA’s executive board. 

It was working on finding an agreement with Cosco on the new conditions in a timely manner, she said. 

With the original 35% deal, the German logistics firm had wanted to tie its long-standing shipping customer to Hamburg port in the face of fierce international competition.

In a filing posted in the Hong Kong stock exchange, Cosco Shipping Ports said it has not received the formal decision from the German ministry of economics and energy and will consider the conditions after the ministry has delivered its decision.

A German government source told Reuters that the Chinese company had agreed to the deal. 

Chinese foreign ministry spokesperson Wang Wenbin, asked about the deal, said on Wednesday that China hoped “relevant parties would see pragmatic cooperation between China and Germany rationally (and) stop gratuitous hype,” without giving further details. 

Supporters of the HHLA deal say it will allow Hamburg to keep pace with rival ports that are also vying for Chinese trade and some of which are partly owned by Cosco.

(Reporting by Andreas Rinke, Jan Schwartz, Eduardo Baptista, Paul Carrel; writing by Rachel More, Kirsti Knolle; editing by Maria Sheahan, Louise Heavens and Nick Macfie, Reuters)

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