Germany Split on China's Cosco Taking Stake in Hamburg Port

Germany’s ruling parties are split on whether to allow China’s Cosco to take a major stake in a port terminal in Hamburg, which has the country’s largest port.

Economy Minister Robert Habeck of the Greens – a junior party in the ruling coalition – is hawkish on China. He said on Tuesday he was leaning towards not allowing the deal, which would give China a stake in critical German infrastructure.

Shipping giant Cosco last year made a bid to take a 35% stake in one of three terminals in the northern city of Hamburg.

The port authority has warned that blocking the bid could hurt the economy, while Beijing has urged Berlin not to politicize the deal.

The German government’s response is being seen as a gauge of how far it is willing to toughen its stance on China, its top trading partner, due to concerns about being overly dependent on the increasingly assertive authoritarian country.

The chancellery, run by the senior coalition party the Social Democrats, is more in favour of finding a solution to any concerns, three government sources said. Chancellor Olaf Scholz oversaw a boom in Chinese trade while he was mayor of Hamburg from 2011 to 2018.

The chancellery did not immediately reply to a request for comment.

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Port and Carmakers Concerned

Chinese foreign ministry spokeswoman Mao Ning said she hoped Germany would “view Chinese investment in an objective and rational light, and provide a fair, open and non-discriminatory environment for Chinese companies, rather than politicize normal economic and trade cooperation, still less engage in protectionism in the name of national security”.

Volker Treier, trade expert for the German Chambers of Industry and Commerce (DIHK), said he was concerned that if there’s no clear criteria for rejecting the investment, this could negatively impact Germany’s allure for investors generally.

The Hamburg Port marketing director Axel Mattern warned against any veto, saying the Chinese investment would be a “huge win for the port rather than a danger, not least because Cosco will soon become the biggest shipping company worldwide”.

China’s fast expansion has driven growth in Europe’s largest economy over the past 10 years, with German carmakers currently relying on that market for as much as half their profits.

“A rejection of the Chinese would be a disaster not only for the port but for Germany,” he said.

Scholz has warned of any decoupling from China or deglobalisation in general, while also emphasizing the need for Germany to diversify its Asia trade and take strategic concerns more into account in its business dealings.

“We need a culture whereby questions of security and independence are taken into account and we say – it costs but it’s necessary,” he said at the weekend.