Scholz rebuffs cabinet to allow China Bridgehead at Hamburg Port

The German government is close to reaching a compromise over a disputed sale of a stake in a Hamburg container terminal to China’s state-owned shipping conglomerate Cosco Shipping Holdings Co.

Chancellor Olaf Scholz and his ministers, many of whom were opposed to the deal, may agree on a sale of a reduced 24.9% stake to Cosco, a government official said, who asked not to be identified because the talks are confidential. The stake is just shy of what’s considered a blocking minority in Germany.

The deal would be 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. That deal would have passed automatically Wednesday without any discussion in cabinet. 

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.

The sale of 24.9% would at best be an emergency solution to prevent a worse outcome with voting rights for China, the official said. 

The proposed compromise “takes account of the justified concerns about the Cosco investment,” said Verena Hubertz, deputy chairwoman of the parliamentary group of Scholz’s Social Democrats. “This ensures that the Chinese company cannot influence HHLA’s strategic decisions.”

The plan would have to be approved by cabinet on Wednesday because it would mean a partial prohibition of the deal.

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.