Germany nearing compromise on China port bid: reports

Berlin, Oct 25: Germany's ruling coalition is close to striking a compromise that would allow Chinese shipping giant Cosco to take a smaller stake in a Hamburg port terminal than initially planned, news agencies reported on Tuesday, citing government sources.

Last year, Cosco had made a bid to take a 35% stake in one of logistics firm HHLA's three terminals in Germany's largest port in Hamburg.

There is reportedly a dispute between German Chancellor Olaf Scholz and several government ministries over the bid, amid concerns that it would give Cosco too much of an investment share in the port. Cosco, which is headquartered in Beijing, is already the Hamburg port's biggest client.

As per reports, Berlin may approve a sale of 24.9% of the terminal to Cosco under the compromise.

The decision comes as Germany tries to strike a balance between maintaining ties with its biggest trade partner, China, while avoiding heavy reliance on it.

Tensions between China and Western countries have deteriorated recently. During a NATO summit last summer, member-states declared China as a "security challenge."

What is the reaction to the revised deal?

Government officials told German news agency DPA the revised share for Cosco was an "emergency solution" to save the deal without giving the Chinese company any substantive influence on the management of the important terminal.

Initial media reports citing sources close to the negotiations suggest that Cosco might agree to the smaller stake deal.

However, Germany's ministries of economy and foreign affairs continued to caution against the deal.

Lawmaker Marie-Agnes Strack-Zimmermann, described the deal, even after the amended stake, as a mistake. She stressed to DPA that it wouldn't be sound to compromise with a Chinese company amid the current "times of great uncertainty."

Zimmerman is a member of the business-friendly Free Democrats (FPD), the smallest party in Germany's ruling coalition, which also compromises the Green Party and Scholz's Social Democrats (SPD). The deal has also been criticized by Green politicians and the opposition Christian Democrats (CDU).

Marcel Fratzscher, the head of the German Institute for Economic Research (DIW) also slammed the proposed compromise.

"The German government is repeating the mistake of many previous federal governments" by prioritizing "short-term economic interests over long-term prosperity and prosperity and stability," he told Reuters news agency.

Sino-German relations in the spotlight

The news of the compromise come as Scholz prepares to visit China next week.

During Angela Merkel's nearly 16 years as chancellor between 2005 and 2021, Sino-German trade ties flourished, with Merkel often favoring engagement with Beijing rather than confrontation.

The current coalition government under Scholz, however, has seen some voices calling for a harder stance on Beijing. Foreign Minister Annalena Baerbock, a member of the Green Party, has been particularly keen on calling out China on human rights issues such as the treatment of Uyghur Muslims in Xinjiang.

Source: DW