Newcastle Port owner’s close China ties revealed

A company with a major stake in Australia’s largest port describes itself as a “crucial vehicle” for China’s contentious Belt and Road project.

The company that took control of a 50 per cent stake in the Port of Newcastle in 2014 is a state-owned enterprise under the direct control of Beijing that boasts of its role as a “vehicle” for China’s controversial “Belt and Road” initiative.

The Daily Telegraph can reveal that Hong Kong based China Merchant Ports (CMPort) is a subsidiary of China Merchant Group (CMG), which boasts of being a “state-owned backbone enterprise” that is “under the direct supervision of (China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC).”

The Pasha Bulker (now known as the Drake) is loaded with coal in Newcastle Harbour. Picture: Peter Lorimer

As well, in an annual report handed down in 2019, CMPort’s chairman, Deng Renjie, boasted that “the company is a crucial vehicle for CMG to implement the “Belt and Road” Initiative promoted by China and the “Guangdong-Hong Kong-Macao Greater Bay Area” strategy.

While CMPort’s half stake in the Port of Newcastle is not formally known as a Belt and Road project, CMPort has constructed a number of other ports around the world and has been accused of furthering China’s strategy of “debt trap diplomacy” in nations like Sri Lanka.

Currently the Port of Newcastle, the largest port on Australia’s east coast, handles 90 per cent of NSW’s coal exports, valued at around $16bn.

NSW Premier Mike Baird announcing the deal to give 50 per cent control of the Port of Newcastle to CMPort in 2014.

Overall, the port’s annual trade is worth over $25bn, and experts have warned that China’s control could see exporters punished through increased port fees or other means as Beijing pursues its economic warfare against Australia.

In 2014, the then government of NSW Premier Mike Baird inked the deal privatising the port and giving the stake to CMPort, calling it “an amazing result” that “exceeded expectations.”

Earlier this month the Morrison government tore up Victoria’s Belt and Road memorandum of agreement with China, citing new foreign interference laws.

On Wednesday, Peter Jennings, executive director of the Australian Strategic Policy Institute warned of the danger of such foreign ownership.

“We have now seen very clearly that China will use economic points of leverage to coerce political behaviour,” said Mr Jennings, who added that Australia is being singled out standing up to Beijing on a range of issues and that the behaviour will get worse before it gets better.

“There is a Chinese expression that says to scare the monkey, kill the chicken, and we are the chicken in this case,” he said.

“If you have a place like the Port of Newcastle where CMPort is able to put on punitive costs that hurt Australians businesses, that will absolutely happen if the Chinese Communist Party tells them to do so.”

The only question, says Mr Jennings “when will it suit China to do so?”

The Daily Telegraph has approached Foreign Minister Marise Payne for comment.