Can Politics and Business Align? Policy, Transparency and Logistics
Politics and business can be intertwined in many ways but also conflicting. This is especially the case regarding foreign investments and possible influence by third countries in Europe, for example.
The same applies to supply chain diversification policies pursued by states that might not appear financially beneficial for businesses. Is there a fine line between the two? The concept of geologistics might provide some insights in this sense. RailFreight.com interviewed Marie Krpata, research fellow at the Study Committee on Franco-German Relations (Cerfa) and an expert on the topic.
Krpata’s latest research focuses on the concept of geologistics and, specifically, the influence of China on Central and Eastern Europe and the Western Balkan region. She is also interested in the influence of China on Germany and German ports like Hamburg and Duisburg.
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What is geologistics?
As one would assume, the concept balances somewhere between geopolitics and logistics. “I think it's at the intersection between interconnections, transport modes, destinations and geopolitics. So it's logistics at the service of geopolitics,” explains Krpata.
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External dependency
When discussing China’s involvement in European infrastructure, Central and Eastern Europe and the Western Balkans are good examples of European regions where China attempts to acquire allies.
However, these regions could also become China’s “springboards to get into the Western European market where the barriers of entry are higher while the region is also vital in terms of exporting goods and being the main producer of knowledge and innovative technologies,” underlines Krpata.
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Through the Global Gateway initiative, the EU “tries to give impulse to an outgoing strategy using means from the European Union but also co-financing solutions with the private sector, and it tries to target specific regions in the world and specific projects in the world, for instance, the Western Balkans”, explains Krpata.
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However, EU strategies also focus a lot on decreasing dependencies with existing partners, and these strategies could also function as a tool for the Union’s future logistic mapping and remapping.
The difference between the EU and China is the first’s more fragmented nature regarding decision-making. “France is very much in favour of the strategic autonomy, which other countries are concerned about. On the other hand, Germany tries to further this narrative of diversification rather than protectionism, considering that it is also China’s leading trade partner and wants to maintain this profile while staying vigilant because of international developments,” narrates Krpata.
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An opportunity to align
About COSCO's acquiring 24.9 per cent of Tollerort’s container terminal stakes in the port of Hamburg could be the starting point of this process:
“There was much political debate about that, with six ministries within Germany against giving the stake to COSCO. There was the European Commission that was against it as well. German intelligence services were also against it, and the chancellor decided to allow the deal,” narrates Krpata. “But now,” she continues, “HHLA said that it would need a better understanding of whether it could give this stake to another company and what it would need to take into consideration depending on where this company is from. Questions may arise with regard to state-owned companies, stake thresholds and the company’s leverage on strategic decisions.”
In simple words, what HHLA tries to determine is a framework within which it can conduct international business, demanding a clear risk mapping. “These are some questions that need to be approached with transparency and clarity. Governments need to work with businesses on this mapping and on defining some objective tools, considering also decisions made by the EU’s strategic partners that can still impact European business,” concludes Krpata.
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