Monday, October 19, 2015
Some Australian defense officials expressed concern over a Chinese deal to manage an Australian port where thousands of US and local troops train and which provides the country's closest route to disputed South China Sea waters. 

The worries highlight Australia's challenge in balancing growing economic ties with its biggest trading partner, China, with those of its closest military and political ally, the US 

On Thursday, the chief of the Northern Territory, where the port at Darwin lies, defended the Chinese company's lease as not posing any security risk after an unnamed senior military officer expressed concern to the Australian Broadcasting Corporation over it. 

"We spent a lot of time talking to federal agencies, including defense, and raising the question about any sensitivities," Adam Giles, the chief Minister of the Northern Territory told a local radio station. 

In the interview, Mr Giles also said the military uses a separate, nearby port to land amphibious aircraft. The minister's office later said he had been in regular contact with US Marine commanders in Darwin. 

The Australian military and US officials declined to comment, but a top Australian military official said northern commanders had expressed some security concerns. The privately owned Chinese company, Shandong Landbridge Group, which last year also bought an Australian gas company, couldn't be reached for comment. 

The issue arises as Canberra looks to bolster its alliance with Washington to include possible joint South China Sea naval patrols from the Darwin port. Regional tensions remain high as Beijing asserts ownership over islands in the sea that are also claimed by other neighboring countries. 

On Thursday, another diplomatic spat over the South China Sea arose as Vietnam said it was looking into reports that China sank one of its fishing boats in the area, and reasserted its sovereignty over several islands there. A Chinese spokeswoman said she had no information over any such incident but defended China's right to protect its waters from illegal fishing boats. 

The Chinese lease shows the awkward diplomatic feat that Australia faces while trying to forge deeper strategic ties with Washington while becoming increasingly reliant on China for its economic well-being. Two-way trade with China last year was worth $142 billion, compared to $40 billion with US 

Improving the port at Darwin is a key part of the conservative government's ambition to accelerate development of the sparsely populated northern tropics to help boost exports to Asia and offset an economic slowdown. 

The Landbridge deal, signed Tuesday following a competitive bidding process, gives the company a 99-year lease to operate and modernize the port in exchange for 500 million Australian dollars ($US366 million). Mr Giles said 20 per cent of the lease will be held by an Australian entity. 

A free-trade pact signed in June between Beijing and Canberra is likely to boost overall Chinese investment in Australia, even as many lawmakers here remain wary of potential national-security risks flowing from the increasingly intimate relationship. 

Chinese government officials attended a recent infrastructure-investment summit in Darwin, while Chinese investors have been snapping up Australian houses, farms and food companies. 

The port in Darwin is used each year for large military exercises involving thousands of rotating US marines and American Air Force strike aircraft. The area is also home to more than 15,000 Australian personnel and support staff -- two-thirds of the Australian army's total combat power. 

Under the deal with Washington, Australia will host more visits by US warships, troops and aircraft and carry out more joint exercises. Some drills will include countries such as Japan and India, which is likely to stoke China's worries about strategic encirclement by the US and its allies. 

Chinese diplomats criticised Australia over that agreement and for supporting Washington's calls for Beijing to reel back its assertiveness over South China Sea islands. 

Top US and Australian defense and foreign affairs officials, meeting in Boston this week, reaffirmed both country's right of free passage in international waters in the South China Sea. US Defense Secretary Ash Carter said the US would "fly, sail and operate wherever international law allows it." 

Australian Defense Minister Marise Payne, in her first major statements on the issue since taking on the role last month, pointed out that two thirds of Australia's maritime trade passed through the South China Sea. 

"We want to be able to go where we want to go, either by sea or in air terms, where we are legally entitled to under international law," she told Australian state television. "I've made clear we are not happy to see the assertiveness, the intimidation, of China in this case." 

China's Australian Embassy said late on Wednesday that Australia and the US were behaving in ways to "light a fire and add fuel to the flames" and Chinese spokeswoman said Beijing had "indisputable sovereignty" over disputed South China Sea territories
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