ByJorg Luyken IN HAMBURG
5 November 2022 • 3:01pm
Scholtz Jinping

On the south bank of Hamburg’s sprawling harbour, one of the largest cargo ships on the planet, a 400-metre behemoth with “Cosco Shipping” emblazoned on the side, is being unloaded on a rain-swept quay.A dozen cranes lift containers down from the Chinese vessel before smaller straddle carriers whisk them away down Germany’s Elbe river.

This intricate operation is a vivid reminder of the deep trade links that connect Germany to the Far East. The Tollerort Terminal, one of four at Hamburg’s giant port, is almost exclusively used by a single shipping company – China’s state-owned Cosco.But the city of Hamburg’s decision to go one step further and sell a minority stake in the terminal to the Chinese firm has led to uproar.

Critics say it shows that Germany is failing to learn the lessons of its disastrous reliance on Russian gas and is still seeking to chum up to autocrats in order to secure preferential treatment for its companies.

“What still has to happen for Germany to arrive in reality and not roll over in front of the enemies of the free world?” asked Marie-Agnes Strack-Zimmermann, a senior Free Democrat politician.

Olaf Scholz, the chancellor, was in China on Friday to talk to leader Xi Jinping and, according to reports, he did not bring up Cosco.

A comment piece on Saturday by public broadcaster ARD called the trip to Beijing, which has been heavily criticised, “a continuation of Scholz’ lonely course, in which he has proven in the past that… despite all the warnings from advisors, ministries and security authorities, he personally opened the gate to the port of Hamburg to China.”

On Saturday, Mr Scholz defended his trip to China as “worth it” due to an agreement to oppose the use of nuclear weapons in the war in Ukraine.Emmanuel Macron, the French president, has also warned Berlin that “we have made strategic errors in the past with the sale of infrastructure to China”.

Media reports suggest that Mr Scholz, who was mayor of Hamburg for seven years, pushed the deal through against the objections of most of his Cabinet.But he had to accept a compromise by which Cosco’s share fell from 35 per cent to 24.9 per cent.At the offices of Hamburger Hafen und Logistik (HHLA), the company selling part of its business to Cosco, the deal is justified on the grounds that all of Hamburg’s competitors have already done the same thing.

“Hamburg is stuck in an extremely hard competition with the other European harbours,” says Hans-Jorg Heims an HHLA spokesman.

Cosco already holds stakes in Europe’s other two major ports, Rotterdam and Antwerp, leading Hamburg to fear that Cosco would take its business elsewhere.

“They could have said: ‘why should we land our freight at Hamburg when we have part-ownership of harbours in Rotterdam and Antwerp?’” Mr Heims says.

For a city whose fortunes rest on the success of its harbour, that was a risk that no one was willing to take.

“The harbour is the heart of Hamburg’s economy, that was always the case and it will remain the case in the future,” says Norbert Aust, head of the city’s chamber of commerce, who has welcomed the deal.

A third of trade done through Hamburg’s harbour is now with China, while more than a third of that is handled by Cosco.

From Mr Aust’s point of view, the “much bigger danger” than Beijing using the terminal to exert political influence is a situation in which Hamburg loses business to Rotterdam or the Greek port of Piraeus, which lies completely in Coscos’s hands.

“That would be a heavy blow for the port of Hamburg,” he says.

Besides, the city has been careful not to hand the Chinese firm any meaningful control, Mr Aust says.

“No part of the port will be sold, nor any part of the logistics company, we are talking about the operator of a single terminal who has leased the ground from the city government,” he states.But China watchers say that the investment is another piece in the puzzle of Beijing’s long-term strategy of building market dominance in Europe.

“Beijing’s geo-political goal is one of influence,” says Jacob Gunter, a researcher at the Mercator Institute for China Studies in Berlin.

“We saw this come out during the discussions about the port, where Cosco suggested it would take its business elsewhere if the deal wasn’t approved,” says Mr Gunther.And the comparison to Russian gas is an apt one, he continues.

“During the pandemic and now with the Ukraine war, we’ve all learned a lesson about how inflation is connected with energy and logistics. Both ports and pipelines are critical infrastructures that affect all other things.”

The HHLA and analysts are in agreement though that a solution to the company’s grip on Europe’s ports needs to be found at home.Mr Gunter says that the remedy to Europe’s harbours competing for Cosco’s affections lies in setting common standards across the EU to “prevent a race to the bottom”.