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Germany has agreed to sell a stake in the port of Hamburg to a Chinese company in what is bound to be seen as a highly controversial deal putting Germany in a position of dependency to Beijing.
Euronews reported that the German government had given COSCO the green light to acquire a stake of less than 25 in the port of Hamburg. This was a much lower interest than the initial plan, which saw the Chinese company acquiring 35 percent in the piece of critical infrastructure.
The economy ministry of Germany said this decision prevented the Chinese company from making a “strategic investment” in the port of Hamburg and "reduces the acquisition to a purely financial investment".
There has been strong opposition to the deal within Germany’s parliament and the government itself. In the context of Germany’s Russian energy dependency and how that backfired, there is a concern in political circles that allowing a Chinese company into something as important as the port of Hamburg would give it too much power in Germany.
COSCO is already the biggest client of the port of Hamburg, Euronews noted in its report.
"The reason for the partial prohibition is the existence of a threat to public order and safety," the economy ministry said. It added that COSCO will not be allowed to boost its stake above 25 percent without an investment review. The Chinese company was also banned from granting itself veto power over strategic decisions at the port of Hamburg.
The foreign ministry of Germany is also unhappy with the decision, Reuters reported. It issued a statement that said the acquisition "disproportionately expands China's strategic influence on German and European transport infrastructure as well as Germany's dependence on China".
"Cooperation should be mutually beneficial," a spokesman for the Chinese Foreign Ministry said, as quoted by Euronews. "We hope the relevant party will see practical cooperation between China and Germany in a rational manner and stop unwarrantedly hyping the issue."
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com