Germany’s decision to allow Chinese shipping firm Cosco to buy a stake in a Hamburg port terminal in 2022-23 raised concerns about Europe’s economic dependence on China. Stefan Messingschlager writes that two years on, the deal now looks like the first step in a shift toward a “rules-first” approach to Chinese investment in Europe.
When Cosco sought a 24.9% stake in a Hamburg port terminal in 2022-23, German anxieties about economic dependence on China reached fever pitch. Two years on, Hamburg looks less like the climax of that controversy and more like the starting point of a wider European pivot.
The European Union has moved from adjudicating emblematic investments to a rules‑first regime that supplements national screening with EU‑level tools, including the Foreign Subsidies Regulation, the International Procurement Instrument and – where needed – unannounced inspections. The costs are real, from the burden of compliance to slower procurement. But without this turn, the single market would remain strategically exposed. The question now is not whether to regulate, but how predictable and proportionate enforcement will be.
What Hamburg was – and wasn’t
The Hamburg case was often caricatured as “China buying Hamburg’s port”. In reality, it was neither a control acquisition nor an infrastructure sale. Berlin ultimately cleared a reworked deal in May 2023 that capped Cosco Shipping Ports’ share in Hamburg’s Container Terminal Tollerort at 24.9%, explicitly below governance and veto thresholds. HHLA, the listed operator under municipal control, retained operational and IT control and the terminal remained open to all customers. The land stayed public property. In short, no control changed hands.
Why did a limited stake matter? Because it foreshadowed Brussels’ shift from ad‑hoc politics to a codified response to distortive state support. The Foreign Subsidies Regulation entered into force on 12 January 2023 and created mandatory notification channels for large mergers and high‑value public procurement later that year.
It included clear thresholds: for concentrations, at least one EU‑established party with €500 million EU turnover and combined foreign financial contributions above €50 million over three years is needed, while for procurement, a contract value of at least €250 million and at least €4 million per third country over three years is required. Crucially, the Foreign Subsidies Regulation is legally country‑agnostic: it targets the effects of subsidies, not flags. It also empowers the Commission to investigate ex officio and to conduct on‑site inspections.
Rules in action
The most visible test of the rules‑first line has been the anti‑subsidy case against Chinese battery electric vehicles. Definitive countervailing duties took effect on 30 October 2024, calibrated by company (BYD 17.0%, Geely 18.8%, SAIC 35.3%), and apply on top of the EU’s standard 10% passenger‑car tariff. In April 2025, the WTO established a panel at China’s request to review the EU measures. Europe’s path is neither laissez‑faire nor a tariff wall: it aims to deter injurious pricing while keeping the door open to WTO‑consistent stabilisation.
The Foreign Subsidies Regulation is no paper tiger. In February 2024 the Commission opened its first in‑depth Foreign Subsidies Regulation investigation into CRRC’s bid for a Bulgarian rail tender. Weeks later the bidder withdrew, and Brussels closed the case.
In April 2024 the Commission launched in‑depth probes tied to a Romanian solar park tender. The Chinese consortia then exited and the probe was dropped. In the same month, Brussels opened an ex officio inquiry into Chinese wind‑turbine suppliers across five member states and carried out the first Foreign Subsidies Regulation on‑site inspections at Nuctech’s EU premises, together with national authorities. A pattern is emerging where early scrutiny triggers withdrawals and deters distortions without years of litigation.
Ports in perspective – and Hamburg’s new governance
Set against European comparators, Hamburg’s arrangement is modest. Cosco holds a controlling position at Piraeus (67% of the Port Authority) and acquired full control of Zeebrugge’s container terminal in 2017 before selling small minority slices to partners. Hamburg, by contrast, limited Cosco to a sub‑25% non‑controlling share in a single terminal.
Meanwhile, the city reshaped governance in ways that further dilute Cosco’s influence. In 2024 Hamburg agreed a strategic partnership with MSC that envisages operating HHLA as a joint venture, with Hamburg retaining 50.1% and MSC up to 49.9%.
By 18 June 2025, the city’s holding company (Port of Hamburg Beteiligungsgesellschaft SE) controlled roughly 90.4% of HHLA’s share capital, consolidating municipal control while anchoring a western shipping champion in the port’s future. Rather than retroactively undoing past deals, Hamburg strengthened control structures.
Gains, trade‑offs and the balancing test
A rules‑first turn promises three gains. It protects market fairness by setting common procedures that make it harder for subsidised bidders to win because of state backing rather than efficiency. It adds a competition‑law‑style toolbox – requests for information, call‑ins below thresholds, unannounced inspections – to what had been a patchwork of national security reviews. And it bolsters strategic resilience by applying across sectors, reducing the odds that critical assets are captured through underpriced bids.
Yet there are costs. Mapping “foreign financial contributions” – broadly defined to include grants, loans, guarantees, tax incentives and state‑entity contracts – is labour‑intensive for multinationals, and procurement can slow while Brussels reviews filings.
The Foreign Subsidies Regulation’s balancing test is designed to manage these tensions by weighing potential positives (for example, added capacity for the green transition) against proven distortions – allowing tailored commitments or pricing undertakings where proportionate. The Commission’s draft Foreign Subsidies Regulation Guidelines, now under consultation, promise more predictability on how that balancing will work, with final guidance due by January 2026.
Flanking leverage without closing the market
Two flanking instruments matter where reciprocity or coercion is at issue. The International Procurement Instrument has already been used to limit access to EU medical‑device tenders in response to systematic discrimination against European suppliers in China.
The Anti‑Coercion Instrument, in force since December 2023, provides a graduated response toolbox when a third country applies economic pressure to the EU or a member state. Both make sense only alongside the EU’s de‑risking line: open markets where possible, firm defence where necessary.
From dependency to rule‑based openness
Hamburg shows that Europe is not confined to passive dependence or knee‑jerk bans. A third way – rule‑based openness – is emerging. The test for the next phase is execution: publishing transparent lists of strategic projects, applying the new procurement and auction rules while monitoring market effects, and keeping enforcement proportionate and predictable. If Brussels and member states hold that line, the single market can welcome outside capital on terms that defend its level playing field in an era of harder geoeconomics.
Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: Thorsten Schier / Shutterstock.com
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