BERLIN (Reuters) – Germany’s cabinet allowed China’s Cosco to buy a stake in a terminal in the country’s largest port on Wednesday, a decision pushed by Chancellor Olaf Scholz that sparked an unprecedented protest within the ruling coalition.
Backed by the Social Democrat-led ministries led by Schulze, the Cabinet approved a 24.9% stake in Cosco to be invested in one of the HHLA logistics companies. (HHFGn.DE) Three terminals in the port of Hamburg.
The approved investment is less than the initially planned 35% quota targeted by the Chinese shipping giant and HHLA and Cosco does not give any say in management or strategic decisions.
But the painful experience of excessive dependence on Russian gas has changed the attitude of many politicians toward strategic foreign investment. Two government sources told Reuters that the Foreign Ministry was so upset with the approval that it had prepared a memorandum on the cabinet meeting documenting its refusal.
The investment “disproportionately expands China’s strategic influence on transport infrastructure in Germany and Europe as well as Germany’s dependence on China,” said the document, seen by Reuters. He points out “significant risks arise when elements of European transport infrastructure are affected and controlled by China – while China itself does not allow Germany to participate in Chinese ports”.
She says that in the event of a crisis, the acquisition will open the door to the possibility of China using politically part of Germany’s critical infrastructure as well as in Europe. The sources said that the Ministry of Economy and the four ministries led by the Liberal Liberal Democrats participated in the drafting of the memorandum.
Schulz, the former mayor of Hamburg, has once again affirmed his will against his coalition partners, the Green Party and the Liberal Democrats. After pushing for a single nuclear power extension last week, Cosco’s move has fueled discord at home and among European allies who oppose Chinese investment and already see Schulz as increasingly isolated.
Schulz is scheduled to travel to China next week.
HHLA welcomes a deal
HHLA, which is majority owned by the city of Hamburg and one of the port’s main users, welcomed the deal.
“We appreciate that a solution has been found in substantive and constructive conversations with the federal government,” said Angela Tetzrat, chair of the HHLA Executive Board.
She said she was working to find an agreement with COSCO on the new terms in due course.
With the original deal at 35%, the German logistics company wanted to connect its longtime freight customer to the port of Hamburg in the face of fierce international competition.
COSCO did not immediately respond to a request for comment. A German government source told Reuters that the Chinese company had agreed to the deal.
Asked about the agreement, Chinese Foreign Ministry spokesman Wang Wenbin said on Wednesday that China hopes that the relevant parties “see pragmatic cooperation between China and Germany logically (and) stop making unreasonable noise,” without giving further details.
Supporters of the HHLA deal say it will allow Hamburg to keep pace with rival ports that also compete for Chinese trade, some of which are partly owned by Cosco.
(Additional reporting by Andreas Renk, Jan Schwartz, Eduardo Baptista, Paul Carrell); Writing by Rachel Moore, Kirsty Knoll; Editing by Maria Sheehan, Louise Heavens and Nick McPhee
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