Australia to probe controversial 99-year lease of Darwin Port to Chinese firm

Australia to probe controversial 99-year lease of Darwin Port to Chinese firm

Australian defense minister Peter Dutton sees Darwin Port’s lease to China as a strategic liability.

CANBERRA, AUSTRALIA — Highly touted as Australia’s front door to Asian markets and a potential hub for resources and agriculture exports, the Australian government is set to review whether to force a Chinese company to sell a lease to a strategically important port used by the United States Marines—a move that could further stoke tensions with Beijing.

In a statement, newly minted Australian defense minister Peter Dutton disclosed that the controversial 99-year-lease on Darwin Port by the Chinese company Landbridge Group has been placed under review and could be scrapped, thus opening a new point of friction in relations between Beijing and Canberra.

The lease deal—brokered by local authorities in Australia’s Northern Territory—has raised serious concern in Canberra and in Washington, seeing it as a strategic liability.

Darwin is the most important port on Australia’s north coast, the closest to Asia and a base for US Marines who rotate in and out of the country.

In an interview by the Sydney Morning Herald, Dutton said that his department had been asked to “come back with some advice” about the 2015 deal and refused to rule out forcing Landbridge to divest on national security grounds.

“The defense review will be carried out and we can look at options that are in our national interests after that,” the defense minister pointed out.

Landbridge is owned by Chinese businessman billionaire Ye Cheng. Based on reports, it has close ties to the Chinese military and in 2015, it won a bidding process operate Darwin Port in a deal worth A$506 million (US$390 million).

Following the Darwin port deal, Australia introduced legislation giving Canberra a veto over future sensitive deals and launching a review of those already signed.

Last month, Australian prime minister Scott Morrison’s ordered the scrapping of the ‘belt-and-road’ deal forged between Beijing and the state of Victoria. This prompted a furious response from China, which warned of “serious harm’ in the already fractured relationship of the two countries

The ‘belt-and-road’ initiative is designed to deepen China’s ties across Asia and the world, but Beijing’s critics say the projects and the companies involved in it are being used as geopolitical levers by the Chinese politburo.

Australia overhauled its foreign investment laws late last year, giving its government the retrospective power to impose new conditions or even force a divestment on deals that have already been approved.

A government source revealed that advice has already been sought on the port at Darwin and this will go to the national security committee in due time.

The awarding of the contract to Landbridge by the Northern Territory government came just a few years after the United States posted the first of a rotating group of US Marines in Darwin. The posting was part of former US president Barack Obama’s pivot to Asia following China’s increased assertiveness in the region and Obama reportedly expressed his displeasure at not receiving a heads up on the port deal.

So far, Canberra has so far canceled four deals using the new law, two of which were belt-and-road initiatives struck by Victoria state with the Chinese government. The other two deals were education agreements with Syria and Iran, also with Victoria state.

The Australian federal government explained that the belt-and-road cancellations were needed to ensure foreign policy consistency. A Chinese foreign ministry spokesman, however, responded to this by urging Australia to abandon its “Cold War mentality and ideological bias” and “immediately correct its mistakes and change course.” (Sourced from the Web by T. Cabrera/AI/MTVN)

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