China-Germany connection to strengthen with China's new investment in Hamburg terminal

The German government's approval to a Chinese investment for 24.9 percent stake in HHLA Container Terminal Tollerort GmbH (CTT) will create space to deepen China-Germany economic and trade cooperation in the future, said German port operator and analysts.

They commented after the German cabinet gave the green light on Wednesday to an investment deal made by Hong Kong-listed COSCO Shipping Ports Ltd for a 24.9 percent stake - less than the initially planned 35 percent stake – in CTT, which is one of three terminals owned by Hamburger Hafen und Logistik AG (HHLA) in Hamburg.

Cooperation between China and Germany is mutually beneficial, China's Ministry of Foreign Affairs said on Wednesday in response to this deal.

"It is hoped that relevant parties will view China-Germany pragmatic cooperation rationally," Wang Wenbin, the ministry's spokesman, told a regular press conference.

COSCO Shipping Ports Ltd is a subsidiary of Shanghai-headquartered China COSCO Shipping Corp Ltd, the country's largest shipping and port management company by sales revenue.

"We appreciate that a solution has been found in objective and constructive talks with the federal government," said Angela Titzrath, chairwoman of HHLA's executive board.

"We want to continue to successfully develop the business relationship with China COSCO Shipping that has existed for 40 years," she said. "Open and free world trade is the basis for a city like Hamburg. A company like HHLA must and wants to maintain good relations with its Chinese trading partners.

Such a result shows German Chancellor Olaf Scholz's pragmatic stance in developing relations with China. The pragmatic stance will inject stability into bilateral ties, said Wu Huiping, deputy director at German Studies Center at Shanghai-based Tongji University.

Thanks to their complementary trade structure, the total trade value between China and Germany rose by 2 percent year-on-year to 1.14 trillion yuan ($158 billion) in the first three quarters of 2022, data from the General Administration of Customs show.

Germany's coalition government had been divided over whether to let the deal go ahead, with some politicians criticizing the initial proposal as it would have given COSCO a major stake in Germany's largest port.

In the face of fierce international competition, those in favor of the deal say it will allow Hamburg to continue to vie for Chinese trade and maintain pace with rival ports, some of which are partly owned by COSCO reported Reuters.

The company already owns stakes in the major ports of Rotterdam in the Netherlands and Antwerp in Belgium, and controls the port of Piraeus in Athens, Greece, noted the Politico news website.

The Hamburg port agreement comes a week before Germany's Chancellor Olaf Scholz, who was once mayor of Hamburg, is due to travel to China.

Dong Liwan, a professor of shipping and port services at Shanghai Maritime University, said that as one of the most important trade hubs connecting Europe with China, the Port of Hamburg boasts great geographical advantage and impressive distribution facilities. It is also a key node of the China-Europe Railway Express freight train service.

The German port's well-connected railroad networks and supporting businesses, such as shipping services, logistics firms, warehouses and freight forwarders, will help secure and enhance CTT long-term planning, cargo-handling capacity, job creation and more integrated logistics services. They will also support the growth of China-Germany trade in the coming years, he said.

CTT has four berths and 14 container gantry cranes. The terminal's own railway station, which has five tracks, is connected to the hinterland, indicating goods can be moved quickly between CTT and other European destinations, according to information released by HHLA.