Port of Hamburg: Scholz defends Cosco decision

Chancellor Scholz has defended permission for the Chinese state shipping company Cosco to enter a Hamburg port terminal. This does not create any dependency. Beijing welcomed the cabinet’s decision.

Chancellor Olaf Scholz has had criticism of the decision to enter China at a container terminal in the port of Hamburg rejected. When asked why Scholz ignored warnings from specialist departments, a government spokeswoman said that the Chancellor had made it clear that the port was not being sold, but “only” a stake in a single terminal.

The relatively small stake does not open up any strategic influence for the Chinese company. Scholz is aware of the dimension of the decision. A stake of 24.9 percent does not create any strategic dependency in the balance, according to the spokeswoman. The decision has nothing to do with the Chancellor’s upcoming trip to China.

Ministries wanted to ban business

The federal cabinet had previously decided on a so-called partial ban after weeks of debate. According to this, the Chinese group Cosco can only acquire a maximum share of 24.9 percent in the container terminal – instead of the planned 35 percent. The slimmed-down entry also no longer provides for a claim to a managing director position. Cosco should also be prohibited from being granted contractual veto rights in strategic business or personnel decisions.

However, many departments were in favor of a complete ban on the business. Federal Economics Minister Robert Habeck and other federal ministers had warned of new dependencies, particularly after experiences with gas supplies from Russia.

A spokeswoman for the Foreign Ministry now said that the ministry, like other departments, had clearly expressed concerns in the discussions. All formal possibilities were used, also in the form of a protocol note. A spokeswoman for the Federal Ministry of the Interior said: “The cabinet’s decision has eliminated the concerns.” A spokeswoman for the economy ministry said the cabinet had made a decision. It was important to the ministry that “special rights” for the Chinese company were prohibited.

China welcomes decision

In a first reaction to the decision, China underlined the advantages for both sides and welcomed Berlin’s approval for entry. A spokesman for the Chinese Foreign Ministry warned against unfounded speculation in this context. It is hoped that cooperation between Germany and China will be considered rationally.

Beijing repeatedly emphasizes joint cooperation, although it has been sealing itself off for several years and making market access more difficult for European companies. At the same time, China is investing massively in infrastructure abroad. The country already has its own terminals in 14 European ports or holds shares in port operators.

Most of the holdings are minority shares and generally apply – as in Hamburg – only to the operation of individual terminals. Only Greece has sold a majority stake port, the port of Piraeus. However, critics complain that such deals make states vulnerable to blackmail.

HHLA CEO rejects criticism of Cosco’s entry

The Hamburg port company HHLA rejected this criticism. “The cooperation between HHLA and Cosco does not create any one-sided dependencies,” explained CEO Angela Titzrath. HHLA will remain an independent, listed company with the Hanseatic City of Hamburg as its most important shareholder.

At the same time, Titzrath emphasized the economic importance of the cooperation with Cosco for her company. The entry of the Chinese company strengthens the “future viability of HHLA” and secure jobs in the Port of Hamburg. Cosco’s stake in the Tollerort container terminal operated by HHLA will make it a central hub for trading goods with Asia. The cooperation also strengthens the Federal Republic as an export nation.

China wants to cement its status as the world’s largest export nation

As a Chinese state-owned company, Cosco fulfills a government mission in Beijing: It is intended to ensure that Chinese products reach the European domestic market quickly and smoothly – and more reliably than products from other countries. China is the world’s largest exporter and President Xi Jinping wants it to stay that way.

But because Washington wants to put up more hurdles for imports from China, Europe’s domestic market is becoming more important for those in power in Beijing. They have ensured that only members of the Communist Party are at the helm of state-owned companies. Corporate policy is at the service of China. And that has definitely had highly political consequences in the past – for example, five years ago, when Greece prevented a resolution critical of China’s human rights violations in the EU. That was exactly a year after Greece sold the port of Piraeus to the Chinese state-owned company.

HHLA: Sales agreement will be adjusted “promptly”.

HHLA boss Titzrath explained that “a company like HHLA must and wants to maintain good relationships with its Chinese trading partners”. After all, China has enormous economic weight. HHLA does not turn a blind eye to human rights violations and the oppression of minorities either. However, “differences” could only be eliminated “in dialogue”, according to the chairwoman of the board.

Both groups would now be in “prompt” talks about a “appropriate adjustment” to their sales agreement. Since Cosco is a non-EU company, the deal that was initiated between the two companies a good year ago was subject to the federal government’s investment approval. If the cabinet had not decided this week, the sale would have been automatically approved as originally agreed between Cosco and HHLA.