Australian Government Reaffirms Commitment to Regain Port of Darwin Control Amid Chinese Diplomatic Warning
The Australian government has reaffirmed its commitment to regaining control of the Port of Darwin, currently under a 99-year lease to Chinese-owned company Landbridge. This objective, cited as being in the national interest, has drawn a diplomatic response from China. Ambassador Xiao Qian has cautioned against potential negative impacts on bilateral trade and investment should the lease be terminated. Landbridge, which acquired the port in 2015, has indicated it does not wish to sell its stake.
Australian Government's Intent and Stance
The Albanese government has publicly committed to returning the Port of Darwin to Australian control, citing national interest. Prime Minister Anthony Albanese announced the forced sale plan during his election campaign, stating it was due to national security concerns and perceived insufficient investment by Landbridge in the port's operations. This stance followed previous statements where Albanese had indicated he would not cancel the lease.
Defence Minister Richard Marles has stated that commercial negotiations regarding the port's future are currently underway, characterizing the matter as complex. The opposition's foreign affairs spokeswoman, Michaelia Cash, has criticized the government for perceived delays in fulfilling its election promise, calling for a clear implementation plan.
The Port Lease and Landbridge's Position
Landbridge, owned by Chinese billionaire Ye Cheng, acquired a 99-year lease on the Port of Darwin in 2015 for $506 million. At the time, the sale did not require federal approval. However, the acquisition subsequently drew attention from national security agencies and former US President Barack Obama.
Landbridge's non-executive director, Terry O’Connor, has confirmed the company's unwillingness to sell its interest. However, he stated its readiness to engage with the Australian government to understand its concerns. The company reported a $9.6 million profit in the last financial year, an increase from a $37 million loss the previous year, with the port reportedly beginning to generate profit after a period of losses.
China's Diplomatic Response
China's Ambassador to Australia, Xiao Qian, has addressed the Australian government's plan regarding the Port of Darwin. He confirmed that discussions concerning the port have taken place between Canberra, Beijing, and Landbridge since the 2022 election.
Ambassador Xiao raised concerns about the intention to reclaim the port, stating that it is not standard business practice to take back an asset after it becomes profitable. He emphasized that while the decision rests with Landbridge:
"the Chinese government has an obligation to protect the legitimate interests of Chinese companies overseas."
He warned that a forced removal of Landbridge from the port could negatively impact investment, cooperation, and trade between Chinese companies and Australia.
China is Australia's largest two-way trading partner, accounting for 24% of all goods and services trade last financial year, valued at $309 billion.
National Security Considerations and Reviews
The policy to compel the sale of the Port of Darwin lease emerged from national security concerns voiced by both the Labor and Coalition parties prior to the 2022 election. However, two government reviews of the port sale, commissioned by both the Coalition and Labor, concluded that there were no national security grounds to terminate the lease. Following the initial sale, the then-Coalition government moved to grant greater powers to the Foreign Investment Review Board.
National security experts have expressed support for the government's plan to compel divestiture. Justin Bassi, executive director of the Australian Strategic Policy Institute, indicated that the ambassador's warnings highlight the rationale for reviewing the lease. Richard McGregor of the Lowy Institute supported efforts to end the lease, noting that similar arrangements would not be tolerated in China.
Former Home Affairs department boss Michael Pezzullo described ending the 2015 lease as "absolutely urgent" due to national security risks and rising regional tensions.
Parliament’s foreign affairs and defence committee also supported a new visa scheme to facilitate the AUKUS pact, which aims to counter Beijing’s influence.
Broader Bilateral Discussions
Ambassador Xiao Qian also addressed other points of bilateral discussion during his press conference. He discussed Chinese People’s Liberation Army (PLA) navy deployments near Australian waters:
Ambassador Xiao characterized Chinese People’s Liberation Army (PLA) navy deployments near Australian waters as "a coincidence," asserting they "had nothing to do with Australia."
He stated they were not in Australian territory or its exclusive economic zone.
Regarding Taiwan, Ambassador Xiao urged Canberra to prepare for a "reunified China":
Regarding Taiwan, Ambassador Xiao urged Canberra to prepare for a "reunified China," stating that opposition to Beijing's control over Taiwan is unacceptable and allows no room for compromise.
He also criticized Australia's Department of Foreign Affairs for expressing concern over major Chinese military exercises conducted around Taiwan late last year, characterizing these statements as "misleading." Australia maintains support for the status quo for Taiwan and opposes any unilateral actions by Beijing to control the self-governed island.