The Australian government announced Friday it has decided not to cancel a Chinese company’s 99-year lease on strategically important Darwin Port despite U.S. concerns that the foreign control could be used to spy on its military forces.
The Department of Prime Minister and Cabinet said it decided after an investigation of the eight-year-old lease that current monitoring and regulation measures are sufficient to manage security risks for critical infrastructure such as the port in the northern garrison city of Darwin.
“Australians can have confidence that their safety will not be compromised while ensuring that Australia remains a competitive destination for foreign investment,” it said in a statement.
Landbridge Industry Australia, a subsidiary of Rizhao-based Shandong Landbridge Group, signed the lease with the debt-laden Northern Territory government in 2015. That was three years after U.S. Marines began annual rotations through Darwin as part of the U.S. pivot to Asia.
The United States has raised concerns that Chinese port access in Darwin would enhance intelligence gathering on nearby U.S. and Australian military forces. Landbridge said in a statement it hopes the decision will end security concerns. Prime Minister Anthony Albanese’s center-left Labor Party was in opposition at the time, and he had argued the lease should never have been allowed due to security concerns.
After Labor won elections last year, Albanese directed his department to investigate whether the lease should be changed or canceled. The Australian decision comes before Albanese flies to Washington, D.C., next week to meet President Joe Biden. Albanese also plans to soon become the first Australian prime minister to visit China in seven years. Neil James, chief executive of the Australian Defense Association think tank, said regulation cannot solve the security risk posed by Chinese control of the port.
“Our problem is going to be if there’s ever any increased strategic tension with China and if we have to do something, even if it’s regulatory, it’s going to be escalatory and make the tension worse,” James said.
“The only way to avoid this problem is not to have the lease in the first place and they should bite the bullet and get rid of it,” James added. Landbridge far outbid 32 other potential private investors with a 506 million Australian dollar (USD 360 million) offer for the aging infrastructure, the provincial government based in Darwin said at
the time.