China’s ambassador to Australia has issued a stark warning to the Albanese government, stating that any move to reclaim the Port of Darwin from Chinese ownership could jeopardize future trade relations and prompt intervention from Beijing. The warning comes amid plans by the Australian government to compel the Chinese-owned company Landbridge to sell its 99-year lease on the port, a decision driven by national security concerns voiced during the pre-election period by both Labor and the Coalition.
Ambassador Xiao Qian criticized the policy at a press conference, highlighting the significant investment Landbridge has made in the port since acquiring it in 2015. “Over the last 10 years, Landbridge has invested a lot,” Xiao stated. “Starting from last year, the Darwin port has stopped losing money and started to make money. Suddenly we hear the government of Australia wants to take it back.”
Background of the Port Sale
Landbridge, owned by Chinese billionaire Ye Cheng, secured the controlling lease of the Port of Darwin for $506 million in 2015. At the time, the sale did not require federal approval, yet it quickly drew criticism from national security agencies and even then-U.S. President Barack Obama. Despite the initial losses, the port reported a $9.6 million profit last financial year, a significant turnaround from a $37 million loss the previous year.
The Albanese government’s plan for a forced sale was announced during a radio interview in the election campaign, with Prime Minister Anthony Albanese arguing that Landbridge had not sufficiently invested in the port’s operations. This move comes after two government reviews, commissioned by both the Coalition and Labor, found no national security grounds to terminate the lease.
China’s Response and Trade Implications
Speaking from China’s embassy in Canberra, Ambassador Xiao emphasized that the decision regarding Landbridge’s role in the port should be left to the company. However, he warned that the Chinese government has a duty to protect the legitimate interests of its companies overseas. “If anything happens, like the port [being taken] back by force or forceful measures, then we have an obligation to take measure to protect the Chinese company’s interest,” Xiao said.
China remains Australia’s largest two-way trading partner, accounting for 24% of all goods and services trade last financial year, valued at $309 billion. Xiao cautioned that forcing Landbridge out could impact substantial investment, cooperation, and trade between Chinese companies and Australia, a scenario not beneficial for Australia either.
Historical and Strategic Context
The controversy surrounding the Port of Darwin sale is not new. The initial transaction led to increased scrutiny over foreign investments in critical infrastructure, prompting the then-Coalition government to enhance the powers of the Foreign Investment Review Board. This development highlights the ongoing tension between economic interests and national security concerns in Australia’s foreign policy.
Meanwhile, China’s military activities in the region have also drawn attention. Last year, deployments of the Chinese People’s Liberation Army (PLA) navy near Australian waters were downplayed by Xiao as coincidental. “It just happened to be connected in that region, in that part of the world. It happened to be near Australia, but not in Australian territory, or even in the EEZ, the exclusive economic zone,” he explained.
Future Relations and Regional Stability
Ambassador Xiao also addressed broader geopolitical issues, urging Australia to prepare for dealing with a “reunified China” and criticizing opposition to Beijing’s moves to control Taiwan. Australia maintains support for the status quo regarding Taiwan and opposes any unilateral actions by Beijing to control the self-governed island.
“We’re somewhat flexible in managing some of the issues of differences between our two countries, for example, trade relations and issues in other areas,” Xiao noted. “But the question of Taiwan is not a question the region should compromise or be flexible with. There’s no room for us to do that.”
The unfolding situation at the Port of Darwin exemplifies the delicate balance Australia must maintain between fostering economic growth and safeguarding national security. As the Albanese government deliberates its next steps, the implications for Australia-China relations remain significant, with potential ripple effects on regional stability and global trade dynamics.
