Germany's Munster — (Reuters) A senior official from the U.S. State Department said on Wednesday that the United States had warned Germany against allowing China to acquire a majority stake in the Hamburg port terminal. This deal has been viewed as a test of how tough Germany is willing to be with its top trading partner.
The largest port in Germany is home to three terminals owned by the logistics company. Chinese shipping giant Cosco made a bid to purchase a 35% stake in one of these terminals last year, but the German coalition has disagreed over whether to approve the deal.
German Chancellor Olaf Scholz's three-way coalition was opposed to the agreement by the two junior partners, who agreed to a sale of only 24.9% of the terminal to Cosco instead of the original intended stake. The purchase no longer formally needs Cabinet approval, which would have been challenging to secure from the Greens and liberal-run ministries because the stake was lowered below 25%.
This deal has been viewed as a test of how tough Germany is willing to be with its top trading partner.
The senior State Department source told reporters on the condition of anonymity that "the embassy made very explicit that we strongly advised that there'd be no controlling interest in China, and as you see when they changed the arrangement, there isn't."
A second official stated that it was "essential for the standards we're attempting to set among all the G7 countries and for the world" to maintain the majority stakeholder status of Hamburg City and the port.
Days before Scholz is scheduled to make his first official visit to China, which will be widely monitored for cues on how serious Germany is about reducing its economic dependence on China and challenging its Communist leadership, news of the U.S. interference in the transaction broke.
According to a second senior official from the State Department, Washington has been collaborating with European partners to make sure that any investments made by China in strategic fields that raise security concerns are properly examined, and that the appropriate measures are taken.
"Germany has screening procedures in place, and from what I've heard, it uses them to examine any investments from China and other nations that raise red flags. I am aware that they have modified this specific investment, "The second representative remarked.
Critics claim Scholz, like his predecessor Angela Merkel, prioritizes Germany's economic interests over larger security concerns in the face of an authoritarian regime that is becoming more powerful.
This deal has been viewed as a test of how tough Germany is willing to be with its top trading partner.
According to the Greens-run foreign ministry, the port investment "disproportionately boosts China's strategic impact on German and European transport infrastructure as well as Germany's dependence on China," according to a document accessed by Reuters.
"Germany has screening mechanisms in place and I know it's used that process at looking at any investment that raises questions coming from China and other countries. I know that they've made some changes to ... this particular investment," the second official said.
According to the memo, there are "great risks that develop when China influences and controls aspects of the European transport infrastructure - while China itself does not permit Germany to engage in Chinese ports."
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