Hamburg Port to Sell Stake to China’s Cosco After Scholz’s Push

The German government has agreed on a compromise which will allow Chinese state-owned shipping conglomerate Cosco Shipping Holdings Co. to buy a 24.9% stake in one of Hamburg’s port terminals.

Chancellor Olaf Scholz and his ministers, many of whom were opposed to the plan, reached the deal prior to Wednesday’s cabinet meeting, according to a person familiar with the matter who asked not to be named on confidential talks. The cabinet gave its approval, the economy ministry said.

The stake is just shy of what’s considered a blocking minority in Germany. This decision prevents a strategic investment in one of Hambuger Hafen und Logistik AG’s terminals and reduces the acquisition to a purely financial investment, the ministry said in a statement. 

“The reason for the partial prohibition is the existence of a threat to public order and safety,” the economy ministry said.

The deal is a face-saving solution for Scholz, who had initially supported the sale of 35% of one of the four port terminals by Hamburg Hafen and Logistik AG.

The chancellor agreed to settle for a smaller deal that would give the Chinese state-owned company less sway after six members of his cabinet -- including ministers of the economy, foreign affairs, finance, transport and defense -- voiced their opposition.

New Procedure

The government’s compromise also ensures that the 25% threshold cannot be exceeded in future without a new review procedure.

“If Cosco wishes to acquire further shares at a later date, any acquisition transaction that exceeds the 25% threshold will trigger a new investment review,” the economy ministry said.

Economy Minister Robert Habeck had resisted the deal and on Tuesday called the then-proposed compromise an “emergency solution.” Chinese investments in Germany’s critical infrastructure shouldn’t be allowed, Habeck said on the sidelines of a European Union energy ministers meeting in Luxembourg.

Dependence Warning

German President Frank-Walter Steinmeier warned against excessive dependence on China. “We will have to reduce one-sided dependencies, wherever that’s possible, especially with regard to China,” Steinmeier told public broadcaster ARD after his return from a trip to Ukraine on Tuesday night.

Separately, Cosco pulled out of an infrastructure project in Europe’s largest inland port in the German city of Duisburg in the summer, newspaper Frankfurter Allgemeine Zeitung reported Wednesday, citing a port representative.

Scholz, who was mayor of Hamburg from 2011 to 2018, will travel to Beijing on Nov. 4 for a meeting with President Xi Jinping. His support for the Hamburg deal was also driven by concerns that the Chinese might consider alternative harbors if it fails, said two people familiar with the matter. Cosco already owns stakes in port facilities in European cities including Rotterdam and Antwerp.