U.S. 'strongly suggested' there be no controlling interest by China in Hamburg port terminal (updated)

Hamburger Hafen und Logistik AG

02/11/2022 22:01

(Adds comment by State Department official, background)
    By Humeyra Pamuk
       MUNSTER, Germany, Nov 2 (Reuters) - The United States
“strongly suggested” that there be no controlling interest by
China in a Hamburg port terminal, a senior U.S. State Department
official said, adding that the final deal was adjusted in the
end with a smaller share for Beijing.
    Shipping giant Cosco made a bid last year to take a 35%
stake in one of logistics firm HHLA's  HHFGn.DE  three terminals
in Germany's largest port, but the German coalition has been
divided over whether to let the deal go ahead.
    Germany approved a sale of 24.9% of the terminal to Cosco
last week, down from the stake originally planned amid
objections to the deal from the two junior partners in German
Chancellor Olaf Scholz's three-way coalition.
    By pushing the stake under 25%, the deal no longer
officially requires Cabinet approval, which would have been hard
to muster from the Greens and liberal-run ministries.
    A senior State Department official speaking to reporters on
the condition of anonymity said Washington has been working with
European partners to ensure that any investments by China in
strategic areas that raise security questions are looked in to
carefully and that appropriate steps are taken.
    “The embassy was very clear that we strongly suggested that
there’d be no controlling interest by China, and as you see when
they adjusted the deal, there isn’t," a second senior State
Department official said.
    News of the U.S. intervention in the deal comes days before
Scholz is set to make an inaugural visit to China which will be
closely watched for clues on Germany's level of seriousness
about reducing its economic reliance on Asia's rising superpower
and confronting its Communist leadership.
    Ensuring that Hamburg City and the port itself still
constitute the majority of stakeholders was “important for the
standards we’re trying to set among all of the G7 countries and
for the world," the second official added.
    The Greens-run foreign ministry said in a document seen by
Reuters that the investment "disproportionately expands China's
strategic influence on German and European transport
infrastructure as well as Germany's dependence on China." 
    The document points to "considerable risks that arise when
elements of the European transport infrastructure are influenced
and controlled by China - while China itself does not allow
Germany to participate in Chinese ports."
 (Reporting by Humeyra Pamuk in Munster, Germany
Writing by Daphne Psaledakis in Washington; Editing by Jonathan
Oatis and Matthew Lewis)
 ((Daphne.Psaledakis@thomsonreuters.com;))