Beijing is “watching very closely” how Canberra handles the status of a port currently leased to a Chinese firm that the Labor government has pledged to return to local control, and will step in if necessary, China’s envoy to Australia said.

If the port was taken back via forced sale, Beijing has an “obligation to protect the legitimate rights of Chinese companies overseas,” Ambassador Xiao Qian told reporters in Canberra on January 28.

The lease of Darwin port to Chinese firm Landbridge Group is an ongoing point of contention between the two nations, which have otherwise significantly improved ties since Prime Minister Anthony Albanese first won office in 2022. While the firm was awarded a 99-year lease in 2015, Albanese pledged before last year’s election to regain control of the strategic asset. 

The Port of Darwin is Australia’s northernmost maritime facility and sits just south of Indonesia and Southeast Asia more broadly. It is located near military facilities that house rotations of U.S. Marines on deployment to the Northern Territory and the decision to lease the port triggered concern from a number of parties, including then-President Barack Obama.

Since Albanese’s pledge to return the port to Australian control and his center-left government’s landslide re-election in May, there has been little visible progress on its status. A forced sale could cause a backlash from Beijing if it perceives China is being treated unfairly.

“We’ll see when it’s time for us to say something, do something, to reflect the Chinese government’s position and to reflect that we have a view and determination to protect our Chinese company’s legitimate interests,” Xiao said at a press conference. “At the same time, I’d like this issue to be properly managed” to show Australia welcomes investment from Chinese firms, he said.

China is Australia’s biggest trading partner and previously expressed anger over pressure from the Trump administration concerning ports controlled by a Hong Kong-based conglomerate near the Panama Canal. Discussions over the sale of the ports is still ongoing.

But the negotiations, which cover 43 ports including two along the strategic Panama Canal, have been progressing slowly, with the future role of China Cosco Shipping Corp. a main sticking point, Bloomberg reported in December.