You are using an outdated browser. Please upgrade your browser to improve your experience.

China Essay


The azure blue wings of the kookaburra briefly flashed through the trees and above the abandoned mullock heaps of old gold mines around Grove Hill south of Darwin.

In its 1870s heyday more than 4000 Chinese worked these mines, adding to the physical and cultural wealth of the Territory.

A decade later 3000 of their compatriots worked laying an astounding kilometre or more of track per day by hand for the Pine Creek railway. They also left an enduring legacy of friendship and Chinese engagement in the Northern Territory, despite later being subjected to race based discriminatory regulations imposed by the Government.

And even later subjected to the forced requisition of Chinatown properties in Darwin in 1942 without fair and just compensation from the Commonwealth. Unfortunately, that too is part of the legacy of Australian reactions to the role of the Chinese in building NT prosperity.

Sadly, in 2020, the clock appears to have turned back and that’s a concern for NT post-Covid economic recovery as it limits the sources of vital investment. It also undermines relationships forged over decades between the NT and China.

These are relationships that lie at the heart of modern NT prosperity, be it in investments in agriculture, pastoral industries or the enabling of energy extraction and distribution to the needy southern state markets. The first and most recent of these is the proposed review, and potential revocation, of all State-to-State MOUs with China on the grounds that they interfere with foreign policy.

This review is cloaked in the fiction that it applies to all agreements, including those with the US, Canada, the UK etc, but the reality is that it is aimed at China. The review includes sister city agreements, State and sister province MOUs, teaching, education and student exchanges between State education departments and universities and MOU agreements between the NT and cities, provinces, and government departments in China in relation to tourism and mining.

For West Australia this may impact on their agreement with the National Development and Reform Commission for cooperation, which has underpinned Australia’s iron ore export success.

For the NT, the Guangzhou-NT MOU puts a foundation under the Donghai airline service to China and the potential to directly tap into the China tourism market. The sister city arrangement between Haikou and Darwin helps with a potential Hainan Airline link to the NT and with understanding why in the Wet season, Hainan hotels are fully booked while the same does not apply in Darwin.

The sister state relationship between the NT and Anhui province underpins student and teacher exchanges. The MOU with the state body, China Chamber of Commerce of Metals Minerals & Chemicals remains an essential platform for Chinese investment in the NT resources industry. The second area of concern is the widening net based on security grounds and the concentration of decision-making power in the hands of the Federal Treasurer.

Australia is introducing changes to foreign investment rules, which the government hopes to be law by January 1, 2021. They mean the Foreign Investment Review Board (FIRB) will scrutinise every bid for an asset classified as a ‘‘sensitive national security business’’, regardless of whether the bidder is state-owned or private, and regardless of the value of the asset.

Australia and the NT have always placed a heavy reliance on the flow of foreign capital and these changes impact on Australia’s top foreign investors, the United States and United Kingdom. China comes in behind Belgium, Japan, Netherlands, Luxembourg, and Singapore.

The FIRB will apply the new national security test to entities operating in the energy, telecommunications, ports, water, and data sectors. The changes also give the Treasurer new powers to have an already approved deal reviewed on national security grounds if circumstances change. Reserving the right to back out of a deal and retrospectively change the conditions of investment is usually associated with high sovereign-risk countries in Africa and Latin America.

These broad changes could also capture small technology companies relying on foreign angel investors. The tech-systems they develop may turn out to have security applications that could trigger compulsory divestment provisions. Investment in a 3D printing software company aimed at private business could be invalidated in the future if the company takes on a defence-related contract.

The concentration of national security powers in the hands of the Treasurer is an inevitable politicising of the investment approval process and of the ability of an investment to proceed and develop with certainty over the life of the investment. Although clearly aimed at China, these changes also impact on every foreign investment in the NT.

This includes pastoral and agricultural investment, as well as gas pipelines and the solar farm designed to transfer energy to Singapore. Many of the new China “experts” driving these policy decisions have rarely visited China and rarely been involved in doing business in China, but this does not prevent them from lecturing China on how it should behave and telling Australian and Northern Territory businesses and Government how they should engage with China.

The NT is uniquely vulnerable. Unlike other Australian sovereign States, the NT is a Territory so legislation can be, and has been, overridden by the federal Parliament. The largest threat to NT prosperity has always been Federal Government indifference or unwarranted Federal Government interference.

As Grove Hill reminds us, this makes it even more critical that we acknowledge the heritage role of Chinese labour in the past prosperity of the NT. We should also acknowledge the inevitable role Chinese investment should play in our future prosperity post-COVID – and that’s an NT responsibility.