The downswing in relations between Australia and China has cast its shadow on the lease of the strategic Darwin Port to a Chinese company. Australia is re-looking at the 99-year lease given to the Shandong Landbridge Group in 2015 to manage the Darwin Port–a commercial and military port in north Australia.
In the latest trade spat between the two nations, Australian defence officials are looking at the contract to see if the port can be taken back from the Landbridge group citing national security. The port was given to the Landbridge Group, a private firm based in Rizhao city, Shandong province, under a bidding process in 2015 for a fee of approximately $390 million.
The strategically positioned port connects Australia to all the major ports in South-East Asian countries as well as China, Japan, South Korea and Taiwan.
Australia is having second thoughts about the port lease to a China company because the multi-use Darwin Port is also the mainstay for Australian and American troops. The port handles the maritime exercises of the Australian forces as well as the visits by foreign navies. It also handles military equipment and materials which are used by the Australian and the US defence forces.
(Image source: Darwin Port Website)
The New York Times quoted Michael Shoebridge, a national-security expert at the Australian Strategic Policy Institute (ASPI), as saying: “There’s a growing recognition by Australia and by our U.S. ally of the value of our strategic geography in the north, centered on Darwin. US and Australian strategy means we need to make much better use of Darwin as a strategic asset for Naval and Air Forces, in particular.”
The newspaper reported that the Landbridge company will "safeguard its interests should Australia terminate the lease", through legal action and by seeking compensation for its losses.
The port controversy has added another dimension to the China-Australia trade war that began when in early 2020 when Canberra vociferously asked for an independent inquiry into the origins of the mysterious coronavirus that has taken the lives of over 3,525,426 people worldwide and caused as many as 169,648,062 infections.
China retaliated by imposing 'punitive sanctions' on Australian farm and mining products. The relations have only escalated with bitter verbal spats and mutual suspicions taking over diplomacy. Despite China being the largest trade partner, Australia remained undeterred against Chinese verbal threats and economic sanctions.
In November 2020, China's Foreign Ministry spokesperson Lijian Zhao tweeted a fake image showing an Australian soldier holding a knife to the throat of an Afghan child. Australian Prime Minister Scott Morrison reacted swiftly demanding an apology from China for spreading fake news.
Last month Australian defence official Mike Pezzullo spoke about, "the drums of war" as tensions rise in the Indo-Pacific region. China reacted by labelling Australia as a "troublemaker" and said that the country is pursuing a "cold war mentality".
With China asserting itself against Taiwan and Japan by sending in aircraft and naval vessels into their sovereign territories, Australian Defence Minister Peter Dutton said last month that a conflict with China over Taiwan cannot be discounted.
In view of the increased tensions in the region, Australia last year embarked on a defence modernisation plan, which includes upgrading four military bases and conducting joint military exercises with the US. The nearly US $578.6 million budget was unveiled in 2020 to ensure that Australian forces remain battle ready and hold military exercises with friendly countries.
China is also upset with Australia as the latter joined the Quad grouping that brings together the US, India, Japan and, now, Australia. With increased suspicions between the two nations and a belligerent China threatening countries in the neighbourhood, both the countries are now reworking their policies towards each other.
