The compromise that makes nobody happy

The federal government has forced the Chinese state-owned company Cosco to reduce its stake in the Hamburg container terminal in Tollerort to a minority stake of 24.9 percent. Cosco originally wanted to acquire 35 percent of the terminal, which belongs to the Hamburg port logistics group HHLA, and make Hamburg the "preferred transhipment point" in Europe. The state-owned Chinese shipping company Cosco has been handling its cargo at Tollerort for many years.

If the federal government had not decided the case by October 31, Cosco's entry at the Tollerort would have been automatically approved at the planned height. Six federal ministries, including the economics and foreign ministries, had previously spoken out against approval. The Federal Chancellery originally did not want to raise any objections to the deal.

The Chinese group Cosco wants to buy parts of the port of Hamburg. Critics fear that China will have too much influence in Germany. Hamburg is under a "high pressure to maintain strong China business," says WELT economic reporter Olaf Preuss.

"I welcome the fact that the federal government is allowing Cosco to participate in a Hamburg terminal company after careful examination and subject to further conditions," said Hamburg's Mayor Peter Tschentscher on Wednesday. "It is of the utmost importance for Germany's security and independence that the Port of Hamburg can hold its own in international competition and work efficiently."

However, the realignment of the business within a few weeks means another serious setback for the growth plans of the Port of Hamburg. In late summer, Hamburg failed with its proposal to the federal government to moor a floating LNG import terminal at the Moorburg pier in order to improve the natural gas supply in the Hamburg metropolitan region in view of the prevailing energy crisis. Such a ship does not fit into the port of Hamburg for nautical reasons. Shortly thereafter, it became known that the federal government would not be able to maintain the desired target depths in the course of the Elbe deepening. The main reason for this is the prevailing weather conditions of recent times.

HHLA boss Angela Titzrath praised the compromise on the Tollerort terminal on Wednesday. “We welcome the fact that a solution was found in objective and constructive talks with the federal government. Our long-standing Chinese partner Cosco Shipping Ports Limited can acquire a minority stake of less than 25 percent in the operating company of Container Terminal Tollerort (CTT) GmbH in Hamburg in compliance with the conditions imposed by the federal government," she said at the HHLA headquarters in Hamburg. "We will promptly hold talks with CSPL about a corresponding adjustment of the agreement."

After the necessary investment review, which is necessary when companies from non-EU countries take over shares in a company, the result is now available “that strengthens HHLA’s future viability and secures jobs in the Port of Hamburg. We want to continue to successfully develop our business relationship with Cosco, which has existed for 40 years." Neither Container Terminal Tollerort, nor HHLA nor the Port of Hamburg would be sold to China: "HHLA will remain an independent, listed company with the Free and Hanseatic City of Hamburg as the most important owner .”

The political dispute over the Tollerort had escalated in the past few days. The main reason for this is the increasingly tense relationship between China and the European Union. In addition to the ministries involved, the Union had also demanded a complete ban on the business from the federal government. The Hamburg FDP head of state and member of the Bundestag Michael Crisis said: "With the partial ban, the federal government confirms the serious danger posed by the Chinese state's participation in critical infrastructure in Germany. I still don't know of any convincing reasons for selling terminal infrastructure in the Port of Hamburg. The clear warnings from the German security authorities must be taken seriously and be a warning to us, especially for the future," said Kruse, who is also a member of the Bundestag's Transport Committee.

However, it was never planned to sell the Chinese company ownership of the infrastructure of the Port of Hamburg. In principle, the land and soil of port facilities, roads and rail routes in Hamburg remain the property of the city. However, the repeated assertion in recent days that China has direct access to “infrastructure” in the Port of Hamburg shows how polarizing this topic has become.

Above all, the compromise that has now been found at Tollerort does not solve the problem that German business and politics have no strategy for dealing with China. President Xi Jinping is aiming for a third term in office, which has so far been unusual in the country, and is further expanding the authoritarian one-party rule of the Chinese Communist Party. Xi is also the general secretary of the Communist Party. “The decision is a face-saving compromise for both sides. But it does not solve the medium-term problem. That is because Cosco is a key player in China's digital and maritime Silk Road strategy," says Rolf Langhammer, trade expert at the Kiel Institute for the World Economy.

Cosco could achieve a dominant position in the handling of trade and global transport through its already many international port holdings. In turn, Cosco's influence in the digital economy is growing, said Langhammer, because Cosco "wants to advance the digitization of global transport with other Chinese partners, especially with Alibaba's financial subsidiary, and can take a very strong position in global transport". It remains to be seen whether Cosco will keep its promise to make Hamburg a preferred hub for container transport in Europe, even with a 24.9 percent stake in Tollerort.

Port of Hamburg Marketing (HHM), in turn, also praised the compromise on participating in the Tollerort. "The positive decision in the investment review process by the Federal Cabinet is of great importance for the competitiveness of the Port of Hamburg," said HHM boss Axel Mattern on Wednesday. HHLA and the Cosco Group could now expand and intensify their business relationships. "As a result, this compromise will also have a positive impact on German foreign trade."

The Hamburg Chamber of Commerce also rates the compromise positively: "The discussions over the past few days have once again made clear to everyone involved the outstanding importance of the Port of Hamburg for the foreign trade-oriented German economy," said Norbert Aust, President of the Hamburg Chamber of Commerce. "The federal government should take this as an opportunity to noticeably improve the legal and financial framework for Hamburg and the German seaports overall."

The compromise on Cosco's entry into the container terminal in Tollerort is also "an important signal of openness to foreign investment in the Port of Hamburg". According to Aust, Germany's largest seaport is in intense competition with European competitors who have already invested much more in terminal investments and have thus been able to generate strong growth in cargo.