Australia reviewing China’s ownership of a Darwin port

Australia is reviewing whether to force a Chinese company to sell a lease to a strategically important port used by U.S. Marines, a move that could further stoke tensions with Beijing.

The National Security Committee of Prime Minister Scott Morrison’s Cabinet has asked the Defense Department to advise on the ownership, Defense Minister Peter Dutton said in an interview with the Sydney Morning Herald published late Sunday. Asked whether the government was mulling forced divestment, he said officials would consider the national interests.

The move is likely to further hurt ties between Australia and its largest trading partner, which have nosedived since the call by Morrison’s government a year ago for Beijing to allow independent investigators into Wuhan to probe the origins of the coronavirus. Since then, China has implemented a range of trade actions against Australian goods, including coal, wine and barley.

The Northern Territory government’s deal in 2015 to sell a 99-year lease to the Port of Darwin to Chinese firm Landbridge Group for 506 million Australian dollars ($391 million) has been criticized by security experts. It came four years after then-U.S. President Barack Obama secured a deal to base about 2,500 Marines in Darwin, which is on the doorstep of the Indo-Pacific.

In December 2015, Australia’s Defense Department dismissed concerns that the sale could undermine national security after the U.S. queried the deal. Then-Defense Secretary Dennis Richardson said worries the People’s Liberation Army could secure access to port facilities were “alarmist nonsense,” adding there was no chance of China spying on U.S.-Australian communications because naval vessels go silent in any commercial port.

Earlier that year, Obama had raised the issue with then-Australian Prime Minister Malcolm Turnbull at a regional forum.

“Australia may be thinking its stocks with China are so low at the moment that it may as well do this now,” said John Blaxland, a former intelligence officer who’s now a professor in international security at the Australian National University. “While the efficacy of this course of action is unclear, it is possible intelligence officials have briefed the government that risks from China’s ownership now merit a reversal of the sale.”

China slammed Australia’s decision last month to use new laws to cancel Belt-and-Road agreements with the Victorian state government. There has been increasing speculation Morrison may use the laws, passed in December, to scrap long-term leases held by Chinese companies at the ports in Darwin and Newcastle.

“In relation to the Port of Darwin, if there is any advice that I receive from the Department of Defense or intelligence agencies that suggest there are national security risks there, then you would expect the government to take action on that,” Morrison said in a radio interview Friday.

Australia’s move comes as the leader of close ally New Zealand said her country’s differences with China are becoming more difficult to reconcile.

“As China’s role in the world grows and changes, the differences between our systems — and the interests and values that shape those systems — are becoming harder to reconcile,” New Zealand Prime Minister Jacinda Ardern said on Monday.

Her statement came after her government, in a bid not to antagonize its largest trading partner, chose to avoid co-signing statements from the Five Eyes intelligence-sharing alliance criticizing Chinese human-rights violations.