Darwin is now the epicentre of our spat with China.
I’ve got a bold prediction for you.
Canberra is going to seize the Port of Darwin.
Possibly by the end of this year.
Now I don’t know if you know the back story to this, but I don’t know if anything else points to how quickly things have gone south between Australia and China.
So back in 2015, a Chinese company, Landbridge, was given a 99-year lease on the Port of Darwin.
It was negotiated by Andrew Robb, the coalition Trade Minister who worked on the China FTA and the lease deal, and then three months (not years, months) after resigning from parliament, went to work for Landbridge as a consultant.
Totally not dodgy.
At the time, the deal raised a few eyebrows. The Americans weren’t happy. They were like, you know we have a Marine base in Darwin right?
But $500m is $500m, and in 2015, Australia’s future was looking very Chinese. We were best buddies.
Fast-forward to 2021 and things are looking very different. As Andrew Robb said last week, the trade relationship with China has “gone to custard”.
And the Cabinet national security committee has ordered the Defence Department to review the lease.
As trade tensions escalated last year, China imposed aggressive sanctions against Australia, applying punitive tariffs on products such as wine, beef, lamb, timber and barley.
Cabinet’s national security committee ordered the Defence Department last month to provide updated advice on whether Landbridge should be forced to relinquish the lease on national security grounds, amid souring relations between Canberra and Beijing.
Defence and ASIO raised no objections when the Northern Territory government under former chief minister Adam Giles signed a $500 million deal to lease the port to Landbridge for 99 years in 2015.
However, the deal provoked anxiety in the Obama administration given the large US Marine deployment in Darwin and national security hawks have repeatedly called for it to be unwound.
Of course it should.
China runs with “capitalism with Chinese characteristics.” One of those characteristics is that the state can get involved in pretty much any company it likes. The line between businesses and the Communist Party is pretty blurry.
And if we’re on an irreversible path towards strategic rivalry – which it seems like we are – in what universe does it make sense for the Chinese government to control a major piece of Australian infrastructure?
And the tone in Canberra has changed so much that the lease has very few allies. Even Andrew Robb says, “Canberra had every right to reassess the port lease in light of changing strategic circumstances.”
Landbridge is, of course, saying it will create “sovereign risk” – it will make Australia look like risky place to invest and do business.
But hardly. The logic is pretty obvious. The fact that the lease has survived so long given the deteriorating trade relationship is evidence of how pro-business Australia is.
I don’t think any of our allies or investment partners are going to care.
So I reckon it’s probably going to happen. Canberra will seize back the lease on the Port of Darwin.
And if anyone is still dreaming that thing can ‘go back to normal’ for Australia and China (looking at you, Labor Party), tell ‘em they’re dreaming.