Piers Akerman: Look for another way out if China won’t accept Darwin Port deal

Sabres are rattling over the Shandong Landbridge Group’s 99-year lease on the commercial port in a deal. What’s happened to cool-headed diplomacy? Piers Akerman asks.

Darwin: There are no red flags flying over Darwin Port, there’s not even a noodle shop, and there are fewer Chinese to be seen here than in any other Australian city.

Yet sabres are rattling over the Shandong Landbridge Group’s 99-year lease on the commercial port in a deal concluded six years ago. What’s happened to cool-headed diplomacy?

It is indisputable that Landbridge is tied to the Chinese Communist Party, as all major Chinese companies must be in President Xi Jinping’s China, and it is just as indisputable that Xi has taken China on a belligerent path that was not envisaged by Australia’s defence and intelligence chiefs in 2015.

Just the year before, Xi addressed federal parliament and gushed about the flourishing economic and cultural interactions and co-operation between our two nations.

But it is also a fact that Landbridge’s billionaire owner Ye Cheng was named by the Chinese government a year earlier as one of the top 10 “individuals caring about the development of national defence”, and the company was later found to have extensive links to the CCP and the People’s Liberation Army.

In Beijing in 2016, Mr Ye said the Darwin Port investment fitted the company’s strategy to expand its shipping and energy interests and served China’s One Belt, One Road foreign policy initiative. In 2019, the company said it was actively working to implement Xi’s blueprint for a globally dominant China.

Darwin Port.

Last month, the federal Liberal Morrison government tore up Victorian Labor Premier Daniel Andrews Belt and Road agreement signed in 2018. The Victorians were totally out of line in agreeing to the arrangement. States don’t have the authority to enter into agreements with foreign governments.

There’s no doubt the Darwin deal blindsided the Liberal Turnbull federal government but the blame for today’s imbroglio can be sheeted home to our defence and intelligence agencies as well as the foreign investment board, each of which expressed a total lack of concern when they became aware that the Chinese company had won the open tender for the port.

The then treasurer Joe Hockey was encouraging the states to raise money by asset recycling — what could possibly go wrong? What did go wrong was Xi’s decision to round up Uighurs and place perhaps a million in re-education camps, to move on Hong Kong before the agreed deadline, to build military positions on artificial islands and to challenge vessels in international waters. And to refuse to accept responsibility for the spread of COVID-19 when Australia asked for an international investigation into the origin of the virus.

Just last week, Beijing cancelled the China-Australia Strategic Economic Dialogue and spewed forth further derogatory remarks about Australia.

What’s been missed in all the rhetoric is the fact that the NT government holds a 20 per cent stake in Darwin Port. Landbridge Australia (which is run from Brisbane, not Darwin) holds the other 80 per cent.

Landbridge’s Chinese billionaire owner Ye Cheng.

The same Defence department which had no problems with the 2015 deal has now been asked by the federal government to review the lease.

To be perfectly clear, Darwin Port is not where the naval facility is based. Further, the shallow waters surrounding the region make it less than ideal for defence purposes except for shallow draft patrol craft.

What mechanisms could be used to reduce tensions?

First, sit down with Landbridge and talk about diluting the level of Chinese ownership that’s causing the political problem. As the port has been making a loss, that might appeal.

Selling 20 per cent to local investors, setting aside 10 per cent for Indigenous community ownership and installing a training program for Indigenous workers could change the sovereignty equation.

It’s time, too, that the NT government, as the other current shareholder, held Landbridge to account and questioned whether the company had met the performance metrics agreed to in the lease document. Where, for example, is the promised six-star hotel on the waterfront? Navy, too, has to be asked whether Landbridge has upheld the details of its separate agreement.

The problem Australia has is with China’s communist leadership’s undoubted control of the company.

As the company does not appear to have honoured the terms of the lease agreement, a peaceable solution should be possible.