Scholz on the rack over deal to give China seaport stake

State-controlled shipping firm buys into Hamburg, amid fears that Germany is ignoring security concerns

ON the south bank of Hamburg’s sprawling harbour, one of the largest cargo ships on the planet, a 1,300ft behemoth with ‘Cosco Shipping’ emblazoned on the side, is being unloaded on a rain-swept quay.

A dozen cranes lift containers from the Chinese vessel before smaller straddle carriers whisk them away down Germany’s Elbe river.

This is a reminder of the deep trade links that connect Germany to the Far East. The Tollerort Terminal, one of four at the giant port, is almost exclusively used by a single shipping company – China’s state-owned Cosco.

But the city of Hamburg’s decision to sell a minority stake in the terminal to the Chinese firm has led to uproar. Critics say Germany is failing to learn the lessons of its reliance on Russian gas and is still cosying up to autocrats.

“What has to happen for Germany not to roll over in front of the enemies of the free world?” asked senior Free Democrat politician Marie-Agnes StrackZimmermann.

Chancellor Olaf Scholz was in China on Friday to talk to leader Xi Jinping and, according to reports, he did not bring up Cosco. He yesterday defended his trip as “worth it” due to an agreement to oppose the use of nuclear weapons in the war in Ukraine.

A comment piece yesterday by public broadcaster ARD called the trip, which has been criticised, “a continuation of Scholz’ lonely course, in which he has proven that... despite all the warnings, he opened the gate to the port of Hamburg to China.”

Media reports suggest that Mr Scholz, who was mayor of Hamburg for seven years, pushed the deal through against the objections of most of his cabinet.

But he had to accept a compromise by which Cosco’s share fell from 35 percent to 24.9 percent. At the offices of Hamburger Hafen und Logistik (HHLA), the company selling part of its business to Cosco, the deal is justified on the grounds that Hamburg’s competitors have done the same thing. “Hamburg is stuck in an extremely hard competition with the other European harbours,” says HHLA spokesman Hans-Jorg Heims.

Cosco already holds stakes in Europe’s other major ports, Rotterdam and Antwerp, leading Hamburg to fear that Cosco would take its business elsewhere. For a city whose fortunes rest on the success of its harbour, that was a risk that no one was willing to take.

A third of trade done through Hamburg’s harbour is now with China, while more than a third of that is handled by Cosco. Norbert Aust, head of the city’s chamber of commerce, believes the “much bigger danger” than Beijing using the terminal to exert political influence is Hamburg losing business to Rotterdam or the Greek port of Piraeus, which lies completely in Cosco’s hands.

Besides, the city has been careful not to hand the Chinese firm any meaningful control, Mr Aust says. “No part of the port will be sold, nor any part of the logistics company.”

But China watchers say that the investment is another piece in the puzzle of Beijing’s long-term strategy of building market dominance in Europe.

“Beijing’s geo-political goal is one of influence,” says Jacob Gunter, at the Mercator Institute for China Studies in Berlin, adding that the comparison to Russian gas is apt. “Both ports and pipe- lines are critical infrastructure that affect other things.”

Mr Gunter says that the remedy to Europe’s harbours competing for Cosco’s affections lies in setting common standards across the EU to “prevent a race to the bottom”.