China ties make Darwin Port a bigger test for Australia than Panama port dispute: analysts

Any decision by Australia to regain control of Darwin Port is likely to differ from Panama’s move to nullify a contract on its geostrategically vital canal, as fears of Chinese retaliation and a limited security consensus limit Canberra’s options, analysts said – though they warned the issue could still reopen strains in the bilateral relationship.

Panama’s Supreme Court ruled on Friday against a subsidiary of Hong Kong-based CK Hutchison Holdings, ending its rights to operate two ports on the Panama Canal. Like Darwin Port in Australia – which was leased in 2015 for 99 years to China’s Landbridge Group at A$506 million (US$354 million) – the case was interpreted through a national security lens.

During last year’s successful re-election campaign, Australian Prime Minister Anthony Albanese and his Labor Party pledged to regain ownership of the port.

Analysts said the Australian judicial system differed from that in Panama, however, while warning that the Albanese government’s handling of the issue could reshape the recently stabilised relationship between Canberra and Beijing.

“There are a number of obstacles [for the Australian government] at present, including contractual and legal protections, compensation and financial costs, domestic political and federal dynamics in Australia, lack of unanimous security consensus, prior reviews, as well as diplomatic and economic retaliation risks,” said Genevieve Donnellon-May, a research fellow at the Pacific Forum.

“However, Darwin Port is a symbolic and politically charged issue in Australia – bipartisan election pledges have highlighted it as a security concern – and Beijing views forced reclamation as hostile interference in legitimate commercial rights.”

Xiao Qian, China’s ambassador to Australia, told Australian media on January 28 that Beijing had “the obligation to take measures” to protect the legitimate rights of Chinese companies overseas should Darwin Port be returned through a forced sale.

South China Morning Post