U.S. cautioned Germany against a Chinese controlling stake in Hamburg port

MUNSTER, Germany, Nov 2 (Reuters) - The United States cautioned Germany against allowing China to obtain a controlling stake in a Hamburg port terminal, a senior U.S. State Department official said on Wednesday, in a deal that has been seen as a gauge of how far Germany is willing to toughen its stance on its top trading partner.

Chinese shipping giant Cosco made a bid last year to take a 35% stake in one of logistics firm HHLA's (HHFGn.DE) three terminals in Germany's largest port, but the German coalition has been divided over whether to let the deal go ahead.

Germany approved a sale of 24.9% of the terminal to Cosco last week, down from the stake originally planned amid objections to the deal from the two junior partners in German Chancellor Olaf Scholz's three-way coalition.

By pushing the stake under 25%, the deal no longer officially requires Cabinet approval, which would have been hard to muster from the Greens and liberal-run ministries.

"The embassy was very clear that we strongly suggested that there'd be no controlling interest by China, and as you see when they adjusted the deal, there isn't," the senior State Department official, speaking to reporters on the condition of anonymity, said.

Ensuring that Hamburg City and the port itself still constitute the majority of stakeholders was "important for the standards we're trying to set among all of the G7 countries and for the world," a second official added.

News of the U.S. intervention in the deal comes days before Scholz is set to make an inaugural visit to China which will be closely watched for clues on how serious Germany is about reducing its economic reliance on China and confronting its Communist leadership.

The second senior State Department official said Washington has been working with European partners to ensure that any investments by China in strategic areas that raise security questions are looked in to carefully and that appropriate steps are taken.

"Germany has screening mechanisms in place and I know it's used that process at looking at any investment that raises questions coming from China and other countries. I know that they've made some changes to ... this particular investment," the second official said.

Critics have accused Scholz of continuing to prioritize Germany's economic interests over broader security concerns in the face of an increasingly assertive authoritarian state as they say his predecessor Angela Merkel did with Russia.

The Greens-run foreign ministry said in a document reviewed by Reuters that the port investment "disproportionately expands China's strategic influence on German and European transport infrastructure as well as Germany's dependence on China."

The document points to "considerable risks that arise when elements of the European transport infrastructure are influenced and controlled by China - while China itself does not allow Germany to participate in Chinese ports."

Reporting by Humeyra Pamuk in Munster, Germany; writing by Daphne Psaledakis in Washington; Editing by Jonathan Oatis and Matthew Lewis

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