June 29, 2023
Beijing is frustrated about the length of time it is taking to finalise a second major review into Chinese ownership of the Port of Darwin, viewing the Albanese government’s deliberations as a litmus test for its attitude towards Chinese investment in Australia.
The Australian Financial Review can reveal Chinese officials have raised a delay in the announcement of the review’s findings with their Australian counterparts, blaming the uncertainty for contributing to some Chinese companies holding off making fresh investments locally.
China’s concerns come ahead of a possible resolution of the dispute over barley exports within weeks as Beijing’s three-month review of punitive tariffs nears an end, potentially coinciding with the mooted visit of China’s foreign minister to Australia in late July.
But while there has been a stabilisation in ties and easing by Beijing of some of its trade restrictions following Labor’s election last May, Prime Minister Anthony Albanese is yet to lock in a date for visiting China despite several approaches.
Business groups agreed ongoing questions over the port’s ownership were an irritant in the bilateral relationship.
“There are a few niggles and Darwin Port is one of them,” said former federal minister Warwick Smith, who chairs the Business Council of Australia’s global engagement committee.
“Darwin Port is something that needs to be resolved, just as those restrictions on our exports need to be resolved.”
In June last year, barely three weeks after coming to power, Mr Albanese announced a fresh review into the lease of Darwin Port by the Northern Territory government to Chinese firm Landbridge for 99 years.
The Foreign Investment Review Board and Defence Department raised no objections when the lease was signed in 2015, and a Defence review for the Morrison government in 2021 reportedly found no grounds to overturn the lease.
But the deal has been criticised as a security threat for handing control of a strategic asset to a Chinese business. The ownership has also been cited as an impediment to developing the harbour for a greater US military presence.
Landbridge rejects claims its ownership is a security risk and remains determined to grow the port business over the long term.
With 12 months ticking over since Mr Albanese ordered the fresh review, the prime minister’s office referred questions about its status to his department.
“The review is now under consideration by government,” a departmental spokesman said.
But the Financial Review understands senior diplomats have told the Albanese government that clarity over the port’s future is needed, arguing Chinese companies are being deterred from making investments in Australia while the ownership remains under a cloud.
China’s ambassador to Australia, Xiao Qian, earlier this month visited the port, describing it as a “mutually beneficial commercial project between China and Australia”.
Treasurer Jim Chalmers, coincidentally in Darwin on Wednesday, has indicated a selective approach to Chinese investment when it comes to stakes in strategic industries.
Earlier this year FIRB approved the China Baowu Steel Group’s involvement in a $2 billion iron ore joint venture with Rio Tinto but in March Dr Chalmers blocked Yuxiao Fund from increasing its stake in critical minerals miner Northern Minerals.
Australia China Business Council president David Olsson said Darwin Port was being raised in his discussions with Chinese business and government figures.
He said Chinese companies remained keen to invest in Australia and there was a general feeling among Chinese investors that the business environment was more conducive.
“But in terms of major strategic investments there hasn’t been much of that recently,” Mr Olsson said.
Opposition home affairs spokesman James Paterson, who has previously labelled the lease a mistake, was also critical of the delay in making the lease review outcomes public.
“Labor talked a big game in opposition about the Port of Darwin, but more than 12 months in they’ve failed to take any action at all. It’s time they stepped up and stopped making excuses,” he said.
