China Spy Fears Over Aussie Port Deal Are Absurd, Defense Says

  • Defense Secretary Richardson speaks about Darwin port sale
  • China's Landbridge Group buying Northern Australian port

Australia’s defense department dismissed concerns that the sale of a port in the northern city of Darwin to a Chinese company could undermine national security after the U.S. queried the deal.

Defense Secretary Dennis Richardson rejected concerns the People’s Liberation Army could use the purchase by the privately-held Landbridge Group to secure access to port facilities as “alarmist nonsense."

“The notion that Landbridge is leasing Darwin somehow or other as part of a broader strategic play by China and this gives the PLA navy access to Darwin is simply absurd,” Richardson told lawmakers in Canberra. There was no chance of China spying on U.S.-Australian communications because naval vessels go silent in any commercial port, he said.

Australia is reviewing rules for selling state-owned infrastructure to foreigners after President Barack Obama’s administration raised concerns about the deal in Darwin, where U.S. Marines are based. Obama and Australian Prime Minister Malcolm Turnbull discussed the issue at a regional forum in Manila last month.

The issue highlights Australia’s delicate balancing act in maintaining close relations with the U.S. -- its main military ally -- and China -- its biggest trading partner. Australia is seeking to tap overseas investors as it sells off assets to raise money to improve infrastructure.

Landbridge, which operates a 30-million metric ton per annum port in North Haizhou Bay in Shandong province, is paying A$506 million ($366 million) for the 99-year-lease to operate the port, with the Northern Territory government planning to use the proceeds to invest in new infrastructure.

The sale didn’t need approval from the Foreign Investment Review Board because asset sales by the nation’s eight states and territories don’t need approval from the regulator under current laws, Richardson said. Changes to the law should be pursued, he said, adding that the defense department had no issues with the deal.

“We did our due diligence very carefully and over an extended period of time in respect to the Port of Darwin,” Richardson said. “Nothing that has been said since the announcement has given us pause for thought.”

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