Germany allows Chinese shipping group a stake in its biggest seaport

The German government has agreed to allow Chinese shipping conglomerate Cosco to take a stake in the country’s biggest seaport, in a decision that has divided lawmakers and drawn criticism from Brussels.

Cosco Shipping Ports will be permitted to acquire up to 25 per cent of the Tollerort container facility — one of several terminals that comprise the port of Hamburg — the federal government announced on Wednesday.

The deal is a compromise, agreed at the insistence of German chancellor Olaf Scholz, after opposition on national security grounds from his economy, foreign, defence and interior ministries. Cosco originally planned to acquire 35 per cent of the terminal, for €65mn, from logistics company HHLA, in a bid announced last year.

The acquisition comes at a sensitive time for relations between Berlin and Beijing: Russia’s war in Ukraine, in particular, has given impetus to critics of Germany’s economic ties to potential geopolitical rivals.

China is Germany’s largest trading partner, and Scholz will travel to China next week in his first official trip to Beijing, taking a business delegation with him.

The economy ministry said that, under the revised terms of the port deal, Cosco would not be able to exert any undue influence on the management of the terminal. The Chinese company is already the port’s largest customer.

“Any further acquisition above [the 25 per cent] threshold is prohibited,” the ministry said. “This prevents a strategic participation in [Tollerort] and reduces the acquisition to a purely financial participation. The reason for the partial prohibition is the existence of a threat to public order and safety.”

Cosco Shipping Ports is a Hong Kong-listed subsidiary of the state-owned company China Cosco Shipping Corporation, whose subsidiaries also provide support to China’s navy.

In Europe, Chinese companies hold shares in about a dozen ports, including Le Havre and Dunkirk in France, Antwerp and Bruges in Belgium as well as in Spain, Italy, Turkey and Greece.

Scholz’s largest coalition partner, the Greens, have been notably opposed to the Cosco bid.

Green faction leader Katharina Dröge said the compromise was “a mistake”.

“Veto rights and influence on business strategy [might] be curbed for the time being. But a participation [at] 25 per cent still means economic dependence and affects our sovereignty in critical infrastructure,” she told the German Press Agency. “Those who imagine this investment as a purely economic project have learned nothing from the Russia policy of recent decades.”

Friedrich Merz, the leader of the opposition Christian Democrats — the party formerly led by Angela Merkel — meanwhile called for a rethink of relations with China “as a whole”.

Citing warnings from Germany’s foreign intelligence service, the BND, he said a fundamental aspect of the country’s security was at stake.

“I do not understand the chancellor how he can insist on granting such an authorisation in such a situation,” he told broadcaster ARD on Wednesday morning.