Australia leader defends port leasing to Chinese company

Staff Writer
Columbus CEO

CANBERRA, Australia (AP) — Australia's prime minister on Thursday defended the leasing of a strategically important port to a Chinese company, saying the military could seize control in a crisis.

The Northern Territory government has struck a deal to lease Darwin city's port to the Chinese government-linked Landbridge Group for 99 years.

The deal has attracted criticism because Darwin in an important military base on the northern Australian coast, where up to 2,500 U.S. Marines train as part of increasing U.S. defense resources in the Asia-Pacific region.

President Barack Obama raised the deal in discussions with Turnbull at an Asia-Pacific Economic Cooperation summit in the Philippines.

Turnbull said on Thursday that Australian defense officials were not concerned by the deal and had not lost control over the port.

"The Department of Defense or this federal government can step in and take control of infrastructure like this in circumstances where it's deemed necessary for purposes of defense," Turnbull told reporters in Manila.

Australia struggles to balance its relationships with China, its biggest trading partner, and the United States, its most important defense ally.

Andrew Krepinevich, president of the Washington-based think tank Center for Strategic and Budgetary Assessments, wrote in The Australian national newspaper on Tuesday that the port deal appeared short sighted.

"At worst, it threatens to undermine Australia's relations with its closest security partner, the U.S., at a time when the latter is finally beginning to put serious effort behind its 'pivot' to the Asia-Pacific region," Krepinevich wrote.

Australians are wary of increasing Chinese investment, especially from state-owned businesses, with suspicions that the Chinese want to weaken Australian ties to the United States and feed Chinese industry with Australian natural resources at discount prices by buying mines and farms.

The government announced on Thursday it had barred foreigners from buying a company that owns the world's largest cattle ranch and other Australian farmland greater in area than South Korea.

The company, S. Kidman & Co. Ltd., owns 10 cattle ranches, a bull breeding stud and a feed lot covering 101,411 square kilometers (39,155 square miles) in four states.

Australia's Foreign Investment Review Board found that the sale to foreign investors would be contrary to the national interest. But the reasons were not fully explained.

At least three Chinese bidders were reportedly interested in buying the Adelaide-based company.

Turnbull talked down prospects of a Chinese government backlash over that decision. Several Australian and international consortiums had been finalizing their offers in a highly secretive bidding process.

"You would be wrong to assume that there was only one foreign country associated with the buyers. So there's no issue of discrimination here," Turnbull told reporters.