By Jarvis Lee | 2025-06-11

The Australian government is considering reclaiming control of the strategically important Darwin Port in the country's north, a move that has triggered diplomatic friction with China.

Since 2015, the port has been under a 99-year lease held by Chinese company Landbridge Group, a deal that has remained controversial both domestically and internationally.

Australian Prime Minister Anthony Albanese made his position clear during his re-election campaign in April, stating that the port should "be in Australian hands."

Possible ideas include having Australian pension funds buy the port from Landbridge Group, he said.

The decision stems from national security concerns, he said, reiterating the government's commitment to safeguarding sovereignty.

"If it reaches a point where the Commonwealth needs to directly intervene, then we'd be prepared to do that," he said.

The remarks provoked heated objections from Beijing.

"Such an enterprise and project deserves encouragement, not punishment. It is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable," Chinese Ambassador to Australia Xiao Qian said during a joint media interview in late May.

Xiao urged the Australian government to honor the lease agreement with Landbridge Group.

Landbridge Group has made significant investments in Darwin Port and has contributed greatly to the local economy, said Xiao, adding that reclaiming the port lease would have an adverse impact on economic cooperation and trust between the two countries.

A strategic port

Darwin Port holds strategic value due to its proximity to key Australian military bases.

Situated in northern Australia near Southeast Asia, it plays a key role in US-Australia military cooperation. Each year, the US Marine Corps conducts six-month rotations nearby, and both countries have invested heavily in expanding northern military infrastructure to strengthen regional defense capabilities.

The 2015 agreement with Landbridge, which paid 506 million AUD ($329 million) for a 99-year lease, had already drawn attention from the US government at the time. Washington expressed concern that Chinese control of such a critical piece of infrastructure could complicate American military operations in the Asia-Pacific.

China has a major strategic interest in Darwin Port, Prof. James R. Holmes of the US Naval War College told the BBC in early June. Its proximity to the first island chain (the first string of major Pacific archipelagos out from the East Asian mainland) makes it a key element in regional defense.

Darwin's location near the eastern approaches to the South China Sea could enable allied forces to block China's access to alternative maritime routes into the Pacific and Indian oceans, particularly through the Sunda and Lombok straits, he said.

"Blockading the island chains not only limits the maneuverability of Chinese maritime power and deprives Beijing of military options, but it also harms China's economy. Our geographic advantages, military strength and strong alliances mirror China's strategic vulnerabilities," Holmes said.

Growing tensions

Australia's move to review the Darwin lease and possibly reclaim the port reflects growing geopolitical tensions and Canberra's evolving stance on regional strategy. As China's influence in the Indo-Pacific grows, Australia appears to be reassessing its strategic posture.

Australia is engaged in a broader recalibration, political adviser Angelos Kaskanis wrote in Brussels Morning on May 31.

"Australia is recalibrating its strategic posture -- not as a reactionary measure to the ambitions of other powers, but as part of a broader effort to secure its economic sovereignty and defense infrastructure," Kaskanis wrote.

"As geopolitical tensions rise and middle powers assert themselves more forcefully, Australia has a clear choice: continue playing a reactive, support-role game, or emerge as a principal actor shaping the Indo-Pacific's future," he said.

To pursue the latter, he said, Australia would need to adopt a more assertive foreign policy, launch more-robust regional initiatives and invest in ways that reflect its role as a sovereign power rather than merely a loyal ally.