Geoff Wade
Peter Jennings’ ‘Darwin: storm in a port’ has brought to broader attention the apparent nonchalance with which the lease of the port of Darwin by Chinese firm Landbridge has been treated by many parts of the Australian Government.
Landbridge came to Australian public attention in mid-2014 with its share offer and purchase of Brisbane-based gas producer Westside Corporation. The purchase was celebrated by PRC newsagency Xinhua, and widely by the Australian government. The signing of this agreement by Landbridge principal Ye Cheng was held at Parliament House in front of Xi Jinping and Tony Abbott during Xi’s November visit to Australia. Westside soon set about pursuing Armour Energy.
Last month, Landbridge agreed to pay $506 million for a 99-year lease of the Port of Darwin. Labor has suggested that the deal be scrutinised by the Foreign Investment Review Board and some ADF officials have registered security concerns. However, the long-term ramifications of this century-long deal haven’t even begun to be considered by Australia.
What then is the nature of Landbridge? Northern Territory Chief Minister Adam Giles calls it a ‘private sector partner’, and both the Australian Financial Review and the Sydney Morning Herald have adopted the ‘private enterprise’ description. However, given that ownership of major economic entities in China is always murky, it behoves us to look at this entity a little more closely.
The company itself asserts that it is a ‘private’ enterprise. Landbridge Chairman Ye Cheng is, however, intimately tied to the PRC party-state as a member of the 12th National CPPCC Committee, a PRC united front body, in which he represents the All China Federation of Taiwan Compatriots.
More importantly, the company—like any organisation of influence in China—is guided by a powerful branch of the Communist Party of China. This 200-member body takes its orders—through a dendritic structure—from the party central committee and ensures that the company acts in accordance with the party-state’s interests and strategies.
The Secretary of Landbridge’s CPC branch committee is He Zhaoqing, an ex-PLA officer, who has been deputy political commissar of the Public Security office at Shijiu Port, and head of the party committee office of Rizhao Port. He’s now also the general manager, a director and party committee member of the Rizhao Port Group. It’s thus He Zhaoqing and the CPC who control the port development activities of Landbridge.
And, as if to underline the party-state links of the company, in August last year, with the support of the People’s Liberation Army, Landbridge established a people’s armed militia within the company with He Zhaoqing being appointed to lead it. He Zhaoqing had also been cited by the provincial government in 2013 as one of the ten outstanding figures of Shandong province who have devoted themselves to the building of national defence. In short, Landbridge is a commercial front intimately tied to state-owned operations, the party and the PLA.
But this should come as a surprise to no-one. Party control within nominally commercial operations is precisely how the PRC ensures that Chinese economic activity abroad is fully in accord with and serves PRC strategic interests. That is obvious from Chinese efforts to develop Sri Lanka’s Hambantota Port, Pakistan’s Gwadar Port (only a 40-year lease) and the port of Djibouti.
Darwin is intended to be a key link in China’s new 21st Century Maritime Silk Road, providing Chinese access to both the Indian Ocean and the South Pacific, as well as to Indonesia and PNG. China’s ‘sister port’ tie ups with Kuantan, Melaka, Kedah and Port Klang in Malaysia and with Townsville Port in Queensland are readying further nodes in the network. It’s no surprise that Landbridge Infrastructure Australia’s director, Mike Hughes, says the Darwin port project aims to ‘put Darwin on the map for Chinese business.’ And even less surprising is it that Landbridge CPC Committee Secretary He spoke to his members of the company’s role in achieving the ‘dream of a strong nation‘, the ‘dream of renaissance.’
The Maritime Silk Road, along with associated Chinese initiatives such as the $100 billion Asian Infrastructure Investment Bank, the $40 billion Silk Road fund, as well as offshore infrastructure projects such as ports, dams, farms and industrial zones are intended, through realising regional economic domination and subsequent client dependency, to achieve this Chinese renaissance, the ‘China dream’. This in turn will facilitate contention for regional and then global primacy with the United States. The PLA sees one of its key roles as being to protect these economic initiatives offshore. The Darwin deal is thus, among other things, a key element in the PRC’s efforts to weaken the Australian alliance with the US. For these reasons there must be great security concerns about the Darwin deal.
That the Federal Government and the Northern Territory administration should repeatedly claim that Landbridge is a private company and that its investment in Darwin is simply an economic decision suggests either targeted disingenuousness or woeful ignorance. In either case it underlines the urgent need for both much further investigation of the Darwin contract with Landbridge and the creation within Australia of a public database which records and analyses the swiftly-expanding breadth of the interconnected PRC economic, cultural and political activities across Australia, Southeast Asia and Oceania.
Geoff Wade is a visiting fellow at the Crawford School of Public Policy, Australian National University. Image courtesy of Flickr user Commander, U.S. 7th Fleet.
This article first appeared on the ASPI "The Strategist" Blog and is reposted here under a Creative Commons license.