Australia-China ties can worsen over Port of Darwin issue

Australian and Chinese flags are seen at the third China International Import Expo (CIIE) in Shanghai, China November 6, 2020. REUTERS/Aly Song

The already strained relations between Australia and China can worsen over the Port of Darwin, which is under the ownership of a Chinese billionaire.

Australia’s defense department is “reviewing” the Northern Territory’s lease to Landbridge, owned by Chinese tycoon Ye Cheng, after members of Australia’s government and the political opposition raised concerns, Australia’s television reported Sunday.

But if Landbridge is forced to sell its ownership, it would force Australian taxpayers to provide the company compensation.

According to estimates from the Parliamentary Budget Office two years ago, Australia would have to pay about $23.2 million in compensation to Landbridge if it is forced to relinquish Darwin.

The government additionally would have to pay $535 million to buy out the remainder of the lease, which is valid for another 93 years, the report said.

The Chinese company acquired the port after bidding for the asset in 2015. Landbridge agreed to buy rights to Darwin for about $390 million at the time.

Security concerns have mounted over the years regarding the controversial leasing arrangement. Australia is a key security ally of the United States. Landbridge has close ties to the Chinese military, according to ABC News.

Sen. Kimberley Kitching of the opposition Australian Labor Party said the sale was a mistake.

The port “should never have left Australian hands,” the senator said.

“When Cabinet sits down to decide what to do about the Port of Darwin, the public will be expecting its actions to match its recently strong rhetoric,” Kitching said.

Some analysts are recommending the government not overturn the lease.

“We did this five years ago, we did it with our eyes open,” said John Blaxland, professor of international security and intelligence studies at Australian National University.

Australian Prime Minister Scott Morrison said he would only act on the lease on the advice of the Defense Department or security agencies.

Tensions between China and Australia have grown over trade and human rights.

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