China port dilemma is caught in a rising storm

While Anthony Albanese has been busy taking walks on the Great Wall and indulging in a bit of panda diplomacy in China, the federal government’s strategic ports dilemma has just got a whole lot more complicated. The Chinese Communist Party has made it clear throughout Mr Albanese’s extended visit that “non-discriminatory business” is its major concern. The official party newspapers have singled out the decision to overturn a lease held by Chinese interests on the Port of Darwin as being at the front of their concerns. Premier Li Qiang on Tuesday repeated Beijing’s longstanding complaints in a meeting with the Prime Minister and senior Australian business figures. “We hope that the Australian side will treat Chinese enterprises visiting Australia fairly, and properly solve the problems encountered by enterprises in market access, investment review and other aspects,” Mr Li said. The complaint is about more than ports, and extends to technology and rare earths and minerals. The common denominator is the discomfort it causes the US-Australia relationship.

As we report on Friday, the Port of Darwin is now only part of the strategic investments Chinese interests have been making close to our existing and future defence infrastructure involving the US. Two commercial properties within port precincts earmarked for future AUKUS submarine bases have been purchased by the family of a prominent Shanghai businessman. The sites could allow the occupants to surveil the construction of AUKUS sites. As former Defence official ­Michael Shoebridge has noted, the federal government faces a difficult challenge if it is going to have to acquire the sites to build the bases.

It is a remarkable failing that the sale of the port land was not given greater scrutiny by government or the Foreign Investment Review Board. Given their location, the investments must be considered extremely sensitive. The 21.77ha Port Kembla site is located within the Three Ports precinct under State Environmental Planning Policy. The 7.23ha Mayfield North site in Newcastle is described as “a strategically placed holding with huge upside potential located in the exiting Newcastle Portside precinct”.

The purchase has been headed by Wang Yongxin, president of the Shanghai Xinyang Chamber of Commerce and president of the Australia-China Environmental Protection Association, based in Shanghai. His son, Wang Zhongdong, is involved in the projects as a director and denies there is any link with the Chinese government’s propaganda unit, United Front. This is cold comfort given the way Communist Party rules make all companies ultimately subservient to the state. And according to Chinese media, when the Shanghai Xinyang Chamber of Commerce was formed in 2015 the Xinyang municipal party committee and municipal government provided “careful guidance and assistance to the organisation”. The chamber hosts party-related events, according to its WeChat channel, and was approved with the Shanghai Federation of Industry and Commerce, which exists “under the leadership of the CCP”.

Wang Zhongdong said the Australian business operations were entirely independent and privately funded. He said the acquisition of the properties was purely a commercial investment, undertaken through legitimate market channels and for business purposes only. The projects were “focused on sustainable infrastructure, environmental technology deployment and green logistics development – aligned with broader global ESG trends”.

The environmental cloak must not be allowed to obscure the need for the government to pay close attention. Having completed his China visit, Mr Albanese must act decisively to refocus on the national interest, with defence and port security at the top of the list.