Terry O’Connor points to a vacant plot of land overgrown with weeds as he outlines his Chinese employers’ A$1bn-plus investment plan for Darwin, a city in Australia’s sparsely populated far north.
“Work should begin here on a luxury resort by year’s end,” says the chief executive of Darwin Port — a sprawling collection of quays, land and buildings bought in 2015 by Landbridge, a Chinese company founded by billionaire Ye Cheng.
The acquisition is part of what KPMG says is a A$30bn (US$23bn) Australian spending splurge by Chinese investors over the past two years, which has helped the nation’s economy prosper despite the end of a once-in-a-generation mining boom.
State governments and industry have welcomed the cash infusion, which is supporting jobs and investment, but the federal government has become increasingly wary of Chinese companies’ appetite for critical infrastructure such as ports, power networks and gas pipelines following controversy linked to the sale of the port.
Darwin, the capital of Northern Territory, hosts a military base used by US Marines — prompting former President Barack Obama to raise Washington’s concerns about the Landbridge acquisition directly with Malcolm Turnbull, Australia’s prime minister.
The Australian Strategic Policy Institute, a think-tank, has alleged that Landbridge has connections to the Chinese army and Communist party, and warned that the sale could damage US-Australia relations.
It has also questioned the financial strength of Landbridge, which is seeking a loan from the state-sponsored China Export-Import Bank following a series of failed bond issuances in 2015 and 2016.
“The port sale raises questions around access and future development of the port, as well as intelligence,” says Peter Jennings, Aspi director.
Landbridge rejects Aspi’s claims, saying they reflect a mood of “China panic” being whipped up by Australian media.
The company was drawn into controversy regarding…