Germany may allow China’s Cosco to take a smaller stake than originally planned in a Hamburg port terminal, in what a ministry source described on Tuesday as an “emergency solution” to approve the deal but mitigate the impact.
Shipping giant Cosco made a bid last year to take a 35% stake in one of logistics firm HHLA’s three terminals in Germany’s largest port, but the German coalition has been divided over whether to let the deal go ahead.
The compromise being discussed would see Berlin approving a sale of 24.9% of the terminal to Cosco.
Germany’s ruling coalition has been split on the deal since last year, with one camp promoting the economic benefits of the sale and the other warning against business dependence on China and allowing Beijing to secure any further economic leverage.
Sources said Germany’s economy and foreign ministries still wanted to block the deal entirely but are unlikely to succeed as Chancellor Olaf Scholz has not put the issue on the cabinet agenda.
Also on AF: China’s Yuan Drops Near 15-Year Low After Investors’ Selloff
How the coalition handles the matter is seen as a gauge of how far Germany is willing to toughen its stance on China, its top trading partner, due to concerns about being overly dependent on the increasingly assertive authoritarian country.
The sources said negotiations had not yet been finalised. The news comes a week before German Chancellor Olaf Scholz is due to travel to China.
Table Media reported on Monday that Cosco might agree to a deal for a smaller stake, citing sources close to the talks.
“The federal government departments involved see a limit to 24.9 percent as an ’emergency solution’ to prevent worse things from happening,” an economy ministry source said, adding a smaller stake would give Cosco less say in running the terminal.
“Of course, this does not solve the actual risk issues, so the departments continue to believe that a complete ban is the right way to go,” the source said.
Beijing has previously said it hoped Germany would view the deal in an “objective and rational light” without politicising economic relations.
- Reuters, with additional editing from Alfie Habershon
NOTE: This report was updated with further details and the photo changed on October 25, 2022.
Read more:
Germany Split on China’s Cosco Taking Stake in Hamburg Port
EU Leaders Push For United Approach on China Dependency
Germany Seen Reviewing Ways to Cut China Dependency
