Port of Hamburg backs acquisition of COSCO terminal amid German government concerns in China

By William Wilkes and Arne Delfs (Bloomberg) —

Hamburg Hafen und Logistik AG said the German government should not block a Chinese acquisition of a stake in a container terminal, arguing the deal will bring investment to the port and pose no threat to national security.

China’s Cosco Shippings Holding Co Ltd announced on Tuesday that it has postponed an offer to acquire a 35% stake in the Tollerort terminal, the smallest of four container facilities in Germany’s largest seaport.

This was after Economy Minister Robert Habeck indicated last week that the government was likely to veto the deal over concerns over Chinese investment in critical infrastructure. Habeck, a member of the Greens party, and other officials in Chancellor Olaf Scholz’s ruling coalition have recently sharpened their criticism of Beijing over its human rights record and indicated a tougher line on trade with China.

“There are no substantial reasons why this deal should be blocked,” a Hamburg Hafen spokesman said on Thursday. A spokesman for the economy ministry in Berlin said there were no new developments to report.

China’s Belt and Road program, an ambitious plan to develop new trade routes for the Asian economic powerhouse, has seen Beijing-backed companies invest in infrastructure assets in Asia and Western Europe.

Cosco, China’s largest shipping company, has acquired major stakes in strategically important ports, including a majority stake in the Greek port of Piraeus, Athens’ main seaport.

Germany views ports as critical infrastructure, allowing the government to screen and block acquisitions of larger stakes by non-EU companies.

Germany should only approve Cosco’s offer on the condition that the company can be effectively monitored, in particular the digital infrastructure it uses to process goods, according to Rolf Langhammer, a trade expert at the institute. IfW research center in Kiel.

“The same applies to Cosco’s pricing policy, which must not drive competitors out of the market due to Chinese state support,” Langhammer said in an emailed statement Thursday.

“The conditions are necessary because, first, Cosco is a state-owned company formed from mergers with other Chinese shipping companies and is under the direct influence of the government, whose strategic objectives are not known,” he added. .

The scrutiny of Chinese infrastructure purchases has increased in recent years due to concerns about the country’s geopolitical intentions.

Cosco and Hamburg Hafen will continue to work towards closing the deal and have agreed to extend the deadline for all obligations to be fulfilled until the end of this year, according to a statement published on Tuesday.

© 2022 Bloomberg L.P.

James R. Rhodes