The fact that the Chinese company “Cosco” wants to take a stake in the port of Hamburg has been heavily criticized. What is behind the company that now wants to get into Germany’s critical infrastructure?

The planned entry of the Chinese “Cosco” group at the port of Hamburg has become a controversial issue at European level. The sea transport group is expected to take a 24.9 percent stake in a container terminal in the port of Hamburg – the Federal Ministry of Economics has been examining the entry for months.

Chancellor Olaf Scholz is considered a supporter of the deal – but several ministries had recently pleaded for a rejection. The Ministry of Economic Affairs and the Ministry of Foreign Affairs once again emphasized very clearly on Monday that they do not consider an entry with only 24.9 percent to be a good solution, according to government circles. Criticism has also been voiced in the United States.

Critics argue that dependence on China could be increased through participation in critical infrastructure in Germany. And one thing is clear: the Chinese company has close ties to the Chinese military and the government of ruler Xi Jinping.

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The China Cosco Shipping Corporation, “Cosco” for short, is a state-owned shipping company founded in China in 2016. It was created as a merger of the two state-owned shipping groups “Cosco” and “China Shipping Group”. The group is the world’s fourth largest player in the freight forwarding industry, according to data analysis company GlobalData.

The state-owned company, headquartered in Shanghai, is mainly active in domestic and international container shipping and related business areas.

With a turnover of 1.21 billion euros in 2021, “Cosco” owned 395 container ships in September 2022. The company says it operates 409 international and domestic shipping lanes, with its fleet calling at over 574 ports in 142 countries and regions around the world. Previously, “Cosco” was also involved in the Port of Duisburg – but this has been history since the end of June.

Like many other Chinese companies, “Cosco” also has a party committee that is working closely to align the company’s strategy with Beijing’s interests, according to the Financial Times. Because large state-owned companies in China are legally obliged to have a party committee in which company decisions can be discussed with the “CCP”.

Cosco chairman Xu Lirong is also the secretary of the Cosco party committee. He is said to have been a representative at the National People’s Congress in March this year, according to the Financial Times.

In the year of the merger into the current “Cosco”, Beijing passed a law on national defense transport that brought China’s transport sector and the military even closer together. The national intelligence law says the state intelligence service can require companies to help gather information, the Financial Times reports.

But that’s not all: “Cosco” plays a large role in Xi Jinping’s massive naval expansion: “Chinese companies, including shipping companies, are an important part of the integrated military-civilian logistics system,” said Claire Chu, an analyst at “Janes”, a British company News service provider, opposite the Financial Times.

In 2019, the Chinese Ministry of Defense announced the successful resupply of the People’s Navy frigate “Linyi” by a “Cosco” container ship. This was a “breakthrough” for the Chinese, allowing the Chinese Navy to advance to the high seas, according to the Financial Times.

The group maintains close ties with the Chinese defense industry. Most recently, according to the Financial Times, “Cosco” is said to have received high-ranking members of the Central Military Commission.

The company is said to have been involved in China’s preparations for a possible invasion of Taiwan: in the summer of 2020, the civilian ferry “Bang Chui Dao”, operated by the “Cosco” group, is said to be involved in landing exercises for an attack from the sea have been. The ferry was therefore equipped with a ramp that allowed swimming tanks to load and unload in coastal waters.

Nevertheless, Taiwan allows the company to call at Taiwanese ports. In peacetime, the company was able to facilitate trade between China and Taiwan. Recently, however, the Chinese Communist Party has repeatedly emphasized its claim to a democratic Taiwan. Now, this facility could be used to undermine Taiwan’s self-defense, Chau told the Financial Times.

Even in the Russian war of aggression in Ukraine, the company does not position itself clearly against Russia. After the Russian invasion of Ukraine, the world’s leading freight forwarders stopped all their deliveries to and from Russia – only “Cosco” is said to have continued to import Russian crude oil, according to the “Financial Times”. The continued transport to China thus represented an economic pillar for Russia.

There is still a review period until October 31, by which time the federal government could prohibit the business – if it doesn’t, the sale to “Cosco” can take place.