China’s participation: Does the entry at the Port of Hamburg tilt?

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Status: 04/12/2023 06:02 a.m

The Chancellery had almost pushed through the entry of a Chinese state-owned company at the port of Hamburg: But now the container terminal at Tollerort is, according to information from NDR, WDR and SZ as critical infrastructure. Does the deal tip?

By Manuel Bewarder, NDR/WDR, Stefan Buchen, NDR, and Florian Flade, WDR

In the dispute over the possible involvement of the Chinese state-owned company Cosco in a Hamburg container terminal, the federal government is confronted with new facts: According to research by NDR, WDR and “Süddeutsche Zeitung”, the Federal Office for Information Security (BSI) now classifies the Tollerort terminal as a critical infrastructure and therefore as particularly worthy of protection.

The corrected classification does not mean that the business is now automatically prohibited. But the politically sensitive question for the federal government is whether it wants to approve the deal with Cosco. Hamburger Hafen und Logistik AG (HHLA), as operator of the terminal, confirmed the research on request. According to this, the Tollerort terminal has been considered critical infrastructure since the beginning of 2023, namely as “operation of a handling facility in sea and inland ports with a freight volume of 3.27 million tons per year”. In Tollerort, the annual turnover is significantly higher. In coordination with the BSI, the terminal was registered as a critical infrastructure, explained an HHLA spokeswoman.

Upon request, the Chancellery and Ministry of Economics referred to the Ministry of the Interior, which is responsible for the BSI. There it was said that one did not comment on classifications, for example for safety reasons.

Terminal so far no critical infrastructure

In the past, the container terminal at Tollerort was not considered critical infrastructure. For supporters of Cosco’s entry, this was a key argument last year. SPD leader Lars Klingbeil explained that it was “about minority participation in a terminal” and “not about letting the Chinese into the critical infrastructure.”

For his part, Hamburg’s Mayor Peter Tschentscher (SPD) emphasized: “Neither China nor other countries should have access to the critical infrastructure in Germany.” Chancellor Olaf Scholz (SPD) had generally stated that it was a legitimate concern to say that there should be no false influence on infrastructure. “That is not the case in any way in this case.”

exam was delayed

It is still unclear why the stricter classification of the terminal by the BSI was apparently only made now: after research by NDR, WDR and SZ there are said to have been difficulties in the flow of information between the BSI and the Hamburg port operator HHLA in the past. Apparently, this caused displeasure in Berlin government circles last year. HHLA did not respond to this when asked, but announced that the reclassification had taken place because a statutory regulation had changed.

According to the BSI website, those organizations or institutions that are of particular importance for the “public community” are considered critical infrastructure. In the event of failure or impairment, “sustainable supply bottlenecks, significant disruptions to public safety or other dramatic consequences would occur”.

HHLA supports investment

The port of Hamburg is one of the largest in Europe and is of outstanding importance for the German economy. HHLA boss Angela Titzrath recently emphasized the importance of Cosco’s possible entry. The federal government must be aware of the responsibility for the port of Hamburg. HHLA is striving for Cosco’s participation in order to keep cargo tied to the Hanseatic city in the future. China is by far the port’s largest trading partner.

As HHLA recently explained, all the conditions imposed by the federal government have been implemented in the contracts with Cosco and we are now only waiting for feedback from the Federal Ministry of Economics. HHLA has now also stated that with a stake in the Tollerort terminal, Cosco would “gain no access and no decision-making rights – just as little as in relation to the land and soil of the terminal”.

Controversy in the federal government about Cosco participation

The Chancellery made the Chinese investment project a top priority last year. According to information from NDR and WDR Olaf Scholz’s house wanted to push through participation against the vote of the six specialist ministries and the EU Commission. The dispute was finally decided for the time being by a word of power from the Chancellery.

Since the ministries were unable to assert themselves against the chancellor’s office, the cabinet agreed in October that Cosco could only acquire 24.9 percent of the terminal’s operating company instead of the planned 35 percent.

Cosco is already the world’s largest terminal operator

The Port of Hamburg would not be the first in which China has invested. In fact, according to estimates by the Kiel Institute for the World Economy (IfW), around ten percent of Europe’s port capacities are in Cosco’s hands, for example with Hamburg’s competitors in Rotterdam or Antwerp. The Chinese company is already considered the world’s largest terminal operator.

Experts from the Merics China Institute warned early on that entering Hamburg could pose risks for Germany’s security, since China’s rulers are using Cosco to implement their political strategy.

There have recently been media reports in the USA that the US Department of Defense apparently considers Chinese technology at American ports, such as cranes and their computer systems, to be a potential security risk. Accordingly, there is concern that Chinese secret services could access sensitive information about the transport of military goods for US operations or to allied nations via access to the IT systems of ports. The Foreign Ministry in Beijing dismissed such allegations as “excessively paranoid.”

Dealing with China still controversial

Dealing with China is controversial within the federal government. For example, a China strategy that was announced in the traffic light coalition agreement is still missing. In the cabinet, Economics Minister Robert Habeck and Foreign Minister Annalena Baerbock (both Green) are in favor of a stricter course towards China. The country should no longer only be viewed as one of the most important economic and trading partners of the Federal Republic, but increasingly as a counterparty and a possible security risk.

In the case of Russia, people have seen how vulnerable Germany is when an autocratic regime suddenly asserts its own interests, say those who insist on greater independence when dealing with China. The Chancellery, in turn, apparently wants to emphasize the connection to China more.

Foreign Minister Baerbock wants to travel to China this week. It is unclear whether the talks will also deal with the port of Hamburg. From the Chinese side, however, there could well be some questions about the German test process and a final decision by the federal government.



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