COSCO buys 24.9% stake in Hamburg terminal

The Hamburg port operating company, HHLA, welcomed a compromise decision announced by the German federal government on Wednesday for Chinese company COSCO Shipping Port Ltd (CSPL) to buy a stake in one of its three terminals.

The German cabinet agreed to allow CSPL to acquire a 24.9-percent stake instead of the initially planned 35 percent in the container terminal Tollerort in Hamburg in northern Germany.

"We appreciate that a solution has been found through objective and constructive talks with the federal government," Angela Titzrath, chairwoman of HHLA's executive board, said in a press release on Wednesday.

German Minister for Economic Affairs and Climate Action Robert Habeck, of the Greens party, and the Free Democrats, another partner in the three-way coalition government, had voiced concerns about selling what they called a critical infrastructure facility to a Chinese company.

Some German lawmakers have fearmongered the project, saying it was creating dependency on China like Germany's dependency on Russian energy.

German Chancellor Olaf Scholz, a Social Democrat and former mayor of Hamburg, has supported the deal and dismissed the criticism.

A federal government spokeswoman said on Wednesday that the chancellor had made clear that the bid was not about selling the port, but "merely" a stake in a single terminal.

According to the deal, CSPL will have no voting rights, meaning no say in management or strategic decisions.

HHLA and CSPL had signed an agreement in September last year in which the Chinese company would acquire a minority share of 35 percent in Container Terminal Tollerort. The review process by the federal government dragged on until well into this year. In August, HHLA and CSPL agreed to extend the deadline until Oct 31 in order to bring the process to a successful conclusion.

"We want to continue to successfully develop the business relationship with COSCO that has existed for 40 years," Titzrath said.

HHLA said that with CSPL's investment, CTT, the terminal company in which CSPL has 24.9 percent stake, will become a preferred hub for Asian traffic.

HHLA claims that it retains sole control over all major decisions, and COSCO will not receive any exclusive rights to CTT, and that the terminal will remain open to container volumes from all customers.

"The cooperation between HHLA and COSCO creates no one-sided dependencies. Quite the opposite: it strengthens supply chains, secures jobs and promotes value creation in Germany," the company said.

It said that cooperation between the two partners also strengthens the position of Hamburg as a logistics hub in the North Sea and Baltic Sea regions and of the Federal Republic of Germany as an export nation.

The company said that open and free world trade is the basis for a city like Hamburg.

"A company like HHLA must and wants to maintain good relations with its Chinese trading partners," HHLA said.

Hans-Jorg Heims, a spokesman for HHLA, said earlier that the issue had been unduly politicized. He argued that without Chinese investment, Hamburg will be at a disadvantage against other European competitors in which COSCO has a stake, such as in Rotterdam and Antwerp.

Chinese Foreign Ministry spokesman Wang Wenbin said on Wednesday that China-Germany cooperation is mutually beneficial.

"Cooperation benefits both sides. We hope relevant parties will view China-Germany practical cooperation in a rational light and stop groundless hype," he told a daily briefing in Beijing in response to a question about the potential deal.

Lai Suetyi, an associate professor in the Center for European Studies at the Guangdong University of Foreign Studies, said that investment of a State-owned Chinese firm in Hamburg port, the third-largest in Europe, can no longer be a purely economic project in today's context.

The soaring energy price, the Russia-Ukraine conflict together with supply chain interruption "lead to politicalization of any issue with 'systemic rival' like China," she said, referring to European Union's policy in past years describing China as a cooperation partner, economic competitor and systemic rival.