EU warned Germany about Hamburg port Chinese investment

The European Commission warned Germany months ago against Chinese investment in Hamburg's port, a source close to the matter told AFP on Saturday, as Chancellor Olaf Scholz faced criticism for reportedly backing the transaction.

container ships discharged at hamburg port
Container ships are discharged at Hamburg Port terminals. The EU is said to have warned Germany months ago about backing China's investment in the port. (Photo by Axel Heimken / AFP)

The source confirmed information in a report by the Handelsblatt daily that the EU executive had in spring given Berlin a thumbs-down to Chinese shipping giant Cosco taking a 35-percent stake in the port under a deal agreed last year but not yet authorised.

The commission was worried that sensitive information about activity in the port — the third busiest in Europe — could be relayed to China’s government.

Its recommendation was non-binding, with Germany having the final say on the deal.

German broadcasters NDR and WDR on Thursday reported that Scholz’s office is planning to approve the deal despite opposition from six different ministries in Germany’s coalition government.

According to the report by NDR and WDR, the deal would effectively be approved automatically if the government does not intervene by the end of this month.

Scholz, who was mayor of Hamburg between 2011 and 2018 before becoming vice chancellor and then chancellor, announced after attending an EU summit on Friday that he would visit China in November.

He said that “nothing is decided” about the Chinese investment, but noted there were Chinese stakes in other European ports.

The EU’s stance against China, however, has hardened since those other stakes were made.

At the EU summit, leaders agreed they did not seek confrontation with China, wanting its cooperation on climate change and other issues.

But they also expressed discomfort at China’s increasing assertiveness in many areas, including in trade, and its bond with Russia, which is waging war in Ukraine.

European Council President Charles Michel said after Friday’s summit that there must be “more reciprocity and rebalancing in particular in the economic relations between China and the EU”.

Chinese President Xi Jinping on Saturday gathered support from his Communist Party that will enable him to sail through to a third term. Xi previously abolished the presidential two-term limit, paving the way for him to rule indefinitely.

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Germany blocks full Chinese takeover of satellite startup

Germany has blocked a complete Chinese takeover of a satellite startup on national security grounds, sources close to the matter told AFP Thursday, as Berlin takes an increasingly hard line against Beijing.

Germany blocks full Chinese takeover of satellite startup

Concerned at the heavy reliance of Europe’s top economy on China, Chancellor Olaf Scholz’s government has been pushing to “de-risk” and dial back dependencies.

The German tech company KLEO Connect aims to establish its own network of satellites in low Earth orbit that can provide internet to remote locations, hoping to rival Starlink.

The strategic importance of space telecommunications has been highlighted by the Ukraine war where Starlink, operated by Elon Musk-owned company SpaceX, has become a key battlefield tool for Kyiv.

According to German media reports, Shanghai Spacecom Satellite Technology (SSST) holds about 53 percent of KLEO Connect and wanted to acquire another 45 percent from German firm EightyLeo.

READ ALSO: Beijing says Germany’s new China strategy to result in ‘risks’

But Berlin blocked SSST’s move after an investment review by the economy ministry concluded that it could endanger public security.

KLEO Connect did not respond to requests for comment. The economy ministry has also declined comment.

There has been a long struggle for control of the company, at the heart of which are frequency rights – giving access to satellite spectrum – registered in Liechtenstein some years ago, Die Welt newspaper reported.

Other recent cases have highlighted growing German concerns over Chinese investments.

Last year, the government blocked the sale of two chipmakers to Chinese investors due to security concerns.

The proposed sale of a stake in Hamburg port to a Chinese firm sparked a furious political row, but Chancellor Olaf Scholz ultimately approved the acquisition of a stake, albeit at a reduced size.