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‘We will see’: Beijing hints at retaliation over Port of Darwin lease

Matthew Knott - January 28, 2026

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China’s top diplomat in Australia has warned of retaliation from Beijing if the Albanese government forces the sale of the Chinese-owned Port of Darwin, as he issued a stern instruction for Australia to respect China’s position on the need to reunify with the self-governing island of Taiwan.

Chinese ambassador Xiao Qian argued it was a mere coincidence that China had decided to conduct live fire exercises in the Tasman Sea while circumnavigating the Australian continent last year as he left the door open to similar future visits by the Chinese navy.

Xiao also said he saw no prospect of a prisoner swap deal or other way to return jailed writer and former Chinese state security official Yang Hengjun to Australia from Beijing, where he is serving a suspended death sentence on espionage charges.

The envoy’s at times pointed comments highlighted the areas of tension that remain in the China-Australia relationship, even as both sides celebrate the resumption of normal trading relations and diplomatic ties after they fell apart under the Morrison government.

As United States President Donald Trump unsettles traditional allies, Xiao painted China as a dependable partner looking to deepen ties with Australia, including by upgrading and expanding the nations’ existing free trade agreement.

Xiao said that Chinese firm Landbridge, which bought a 99-year lease to Darwin Port in 2015, had invested significantly in the facility and made it profitable, raising ethical concerns about Australia’s bid to return it to Australian ownership.

“When you’re losing money, you lease it to a foreign company and when it starts making money you want to take it back. That’s not the way to do business,” Xiao said at an annual new year’s press conference at the Chinese embassy in Canberra.

Rather than a discrete commercial dispute between the federal government and Landbridge, Xiao said the Chinese government saw the issue as an important matter of principle.

“We respect the decision of the Landbridge company … either to continue or to take a different approach, but the Chinese government has obligation to protect the interests, the legitimate interests of Chinese companies overseas,” he said.

“So if anything happens like the port will be taken back by force or forceful measures, then we have an obligation to take measures to protect the Chinese company’s interest.

“This is our position.”

Xiao said Beijing would be “watching very closely” and “we will see when it’s time for us to say something, do something, to reflect the Chinese government’s position and protect our Chinese company’s legitimate interests”.

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Pressed on what actions China could take to intervene over the port, Xiao said it was still a hypothetical question and he did not want to pre-empt any moves by Beijing.

Both Labor and the Coalition announced during the election campaign that they would move to strip Chinese firm Landbridge of its controversial 99-year lease of the port, which sits directly opposite Darwin’s Larrakeyah Defence Precinct.

Albanese later said: “We’ve said we want to see it in Australian hands. I notice this speculation which is there, but we’ll examine the process. We’re determined to make sure it’s in the national interest for it to be in Australian hands.”

The government has since had little to say about the issue, but Albanese reiterated his previous comments when asked on Wednesday afternoon during his trip to Timor-Leste.

Asked about the Chinese military’s live fire drills between Australia and New Zealand last February, Xiao said they were “normal exercises”, not a provocative act as many Australian defence experts argued at the time.

“It just happened to be conducted in that region, in that part of the world, it happened to be near Australia,” he said.

“It has nothing to do with Australia and it [had] nothing to do with the ongoing campaign of the federal elections.”

If the Chinese military returns to conduct such exercises near Australian waters, Xiao said: “I would advise that over-interpretation is not necessary … We look at each other, at least from the Chinese point of view, as partners, not rivals.

“There’s no reason for China to threaten Australia, and there’s no reason for Australia to interpret the Chinese military exercises as targeting Australia.”

Xiao warned there was “no room for compromise” on China’s position on Taiwan, which it argues is a province of China and an integral part of its territory.

He accused Australia’s Department of Foreign Affairs of making misleading statements in December when it said major Chinese military exercises around Taiwan were “deeply concerning, destabilising and risk inflaming regional tensions”.

Taiwan, a self-governing democratic island of 23 million people, has never been controlled by the Chinese Communist Party but is not recognised as a nation state by most of the world, including Australia.

China’s president, Xi Jinping, has vowed to reunify China and Taiwan in his annual New Year’s Eve speech in Beijing, describing movement towards that goal as “unstoppable”.

Xiao said Australia and China were reviewing their free trade agreement, struck in 2015, to see if there were areas it could be expanded.

Asked about the status of Yang Hengjun, Xiao said Beijing had received regular concerns about his health from Australia but insisted he was relatively healthy for a man of his age.

This masthead reported last year that Beijing prison officials had slashed Yang’s access to food and hygiene products in a move that triggered official complaints from Australian ambassador Scott Dewar.

“The Chinese resident authorities have been providing the basic necessary medical care to look after his health, so he’s in a relatively stable situation,” Xiao said.

He added there were no discussions under way about a prisoner swap or other deal to return Yang to Australia.

“He’s been sentenced to prison. He has to fully follow the Chinese ruling, which is based on the facts and based on the Chinese law,” he said.

https://www.theage.com.au/politics/federal/we-will-see-beijing-hints-at-retaliation-over-port-of-darwin-lease-20260128-p5nxk2.html

https://www.youtube.com/watch?v=CoX8-SoKbos

https://www.youtube.com/watch?v=zN_9VFpzmUQ

https://qresear.ch/?q=Landbridge