By Oliver Noyan and Théo Bourgery-Gonse
(EurActiv) — Berlin’s decision to give Chinese shipping company Cosco a 25% minority stake of Hamburg’s port has drawn criticism from French policymakers, who argue for a united front against the creation of EU-China dependencies.
German public broadcasters NDR and WDR revealed on 20 October that the Chinese shipping giant Cosco was due to take a minority stake in Hamburg’s shipping port despite resistance from several German ministries.
The port is Germany’s largest and the EU’s second largest for container ships, and therefore a key site for EU trade flows.
In the wake of Russia’s invasion of Ukraine, the EU’s wariness of creating new dependencies and calls from the Commission for heightened protections of critical infrastructure in the bloc, French policymakers have criticised Germany’s decision to sell the stake to the Chinese company.
“I am dismayed at the German decision”, majority party MP Anne Genetet, who represents French citizens living in China, told EURACTIV.
Investing in critical infrastructure is “the most effective way China has to advance its interests in Europe,” she added.
Asked by EURACTIV to comment on the German decision and whether new Chinese investments in critical infrastructure were to be expected in France, the French ministry for international commerce said that it “did not have a detailed-enough response to date”, and did not comment further.
Risks to EU economic sovereignty
Reshaping European trade and economic dependencies with China was at the heart of EU leaders’ hours-long discussions at the last European Council meeting on 20-21 October in Brussels.
Fourteen European ports have Chinese conglomerates as shareholders, six of which are through majority stakes.
China’s Merchant Ports (CMP), another Chinese conglomerate, holds minority stakes in three French ports, a state of affairs that Genetet said must be “handled with great caution.”
“French MPs fail to appreciate just how Chinese diplomacy works in practice”, Genetet said, warning both Cosco’s strategic move in Hamburg and the more general spread of Chinese influence in European critical infrastructure can “limit a country’s economic sovereignty.”
Back in October 2021, a report by French institute for military strategy, IRSEM, found that “economic pressures were by far one of China’s most powerful diplomatic levers” in Europe.
“The German decision goes counter to the current EU narrative that there must be a ‘recalibration’ of the economic dependencies between the EU and China”, Elvire Fabry, a senior researcher at the Jean Jaures Foundation, told EURACTIV.
This is in stark opposition to France’s maintenance of a united front, she said, adding that “France has pushed hard for EU-wide legislation on the filtering of foreign direct investments [in 2020].”
Mathieu Duchâtel, Asia Programme Director at the French Institut Montaigne, told EURACTIV that a similar mechanism was enshrined into French law in 2019 – shaped in such a way that it was “tailor-made for China.”
Moreover, the recent announcement that German Chancellor Olaf Scholz is scheduled to travel to China this Friday (4 November) added to growing frustration.
“Germany is a sinking ship,” a French source close to the issue told EURACTIV.
The controversial Hamburg port deal has also triggered debate in Germany about Chinese influence. While the governing SPD and their chancellor Olaf Scholz have been widely in favour of the deal, the Greens and the liberal FDP heavily criticised the move.
Foreign minister Annalena Baerbock has been among the loudest critics. According to her, the Chinese company Cosco should not be “involved at all” in the Hamburg port.
“China prohibits foreign companies from being able to invest in their infrastructure, prohibits companies from being active in China […]. And we then allow all that in our country?” German foreign minister Annalena Baerbock told ARD on Sunday. “That is an absolute distortion of competition”, she added.
Further, the liberal finance minister Christian Lindner proposed a new law to limit the extent of Chinese influence in Germany. Since Beijing will try to create dependencies, “foreign trade law must be changed,” Lindner told Funke media group.
“The Ministry of Finance has taken an initiative to this end on the occasion of the Cosco case,” he added.
While Lindner didn’t name any details on what this new legal framework might entail, the move also seems to have supporters among the SPD.
Lars Klingbeil, SPD chairman, said on Sunday: “When it comes to digitialisation, when it comes to critical infrastructure, when it comes to the question of artificial intelligence, of data, of quantum computers, of all these questions, China has no business being there in Europe.”