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Report: German Gov't Green-Lights COSCO's Hamburg Terminal Stake

cosco
The Tollerort container terminal (HHLA file image)

Published Oct 25, 2022 11:10 PM by The Maritime Executive

Germany's federal government has resolved an internal debate and will allow China COSCO to buy a stake in a Hamburg  container terminal, despite national security concerns, according to German paper Suddeutsche Zeitung. 

German Chancellor Olaf Scholz's office has pushed to approve China Cosco's bid to buy a 35 percent stake in the Tollerort container terminal at Hamburg, despite opposition from six federal ministries in his own government, German public broadcasters NDR and WDR reported last week. That conflict now appears to have been resolved by negotiating down the size of COSCO's stake, and all six ministries are now said to be in agreement. 

If the political approval goes through as reported, and if COSCO is interested in the revised terms, the Chinese state-owned shipping line would be allowed to purchase a 24.9 percent stake in the terminal. By reducing the stake by 10.1 percentage points, the share would be small enough that COSCO would not have direct influence over the terminal's operations. 

Tollerort's majority owner is Hamburg port operator HHLA, which has emphasized that COSCO is not buying a stake in the port overall, but solely in the Tollerort subsidiary. It believes that there are no security implications in the deal, nor does it expect that selling a stake in the terminal to COSCO will give the Chinese carrier outsize influence. 

COSCO is already Tollerort's primary customer, and it already owns stakes in Hamburg's top competitors, Rotterdam and Antwerp. It owns a controlling majority stake in Piraeus, where it is the port operator.  "A rejection of the Chinese would be a disaster not only for the port but for Germany," Hafen Hamburg marketing head Axel Mattern told Reuters last month.

Critics of the sale note that China's investments may come with strings attached. China COSCO is held by China's State-owned Assets Supervision and Administration Commission, and like other state-owned enterprises, it is viewed by Western security analysts as both a commercial enterprise and a vehicle for China's interests. Other nations' experiences illustrate "what it means when China owns or only partially owns critical infrastructure - be it airports, railway networks, power grids," Foreign Minister Annalena Baerbock told SZ earlier this month. 

Baerbock's Green Party is a member of Germany's governing coalition, and under her leadership, it has been skeptical of Chinese and Russian trade ties. The Greens were early critics of Germany's dependence on Russian natural gas - a criticism that has been proven all too accurate.