Professor Roy Green acknowledged that Chinese investment abroad was a controversial subject, but he had seen nothing to dissuade him from the view that the Chinese had bought into the port because it was a good commercial investment. As shareholders, the Chinese were keen to see the port expand to include a container terminal, but they were leaving the operational side of the business to the Australian management team.

The NSW government privatised the Port of Newcastle in 2014, with an Australian-Chinese consortium paying $1.75 billion for a 98-year lease. The Chinese stake is held by a subsidiary of China Merchants Group, which was founded in Hong Kong in 1872 and nationalised in 1999. It describes itself as China’s biggest state-owned enterprise, with assets of $1.49 trillion, and its second most-profitable, with profits in 2017 of $26 billion.  

The Australian half is owned by The Infrastructure Fund, which invests on behalf of Australian superannuation companies. Security concerns were raised by the United States when another Chinese company, Landbridge, leased the Port of Darwin in 2015 for 99 years, but no such concerns have emerged about Newcastle.

In February, China Merchants said the lease would shift to a subsidiary, China Merchants Port Holdings Company Ltd, which is listed on the Hong Kong stock exchange. It is regarded as the world’s biggest container company, shifting 100 million TEU (or “20 foot units”, the standard measure of containers) in 2017 and making a profit last year of more than $360 million. Although CM Ports lists 17 operations, plus Newcastle, outside of China, they only accounted for about 9 per cent of its containers last year, according to its annual report.

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DP World, which has a terminal at Botany and which is reportedly interested in operating out of Newcastle, handled 70 million TEU last year, with capacity to shift 88 million. DP World began in Dubai in the United Arab Emirates in 1972 and has grown to become an international player with 78 maritime and inland terminals across 40 countries. It recorded an after-tax profit last year of $1.5 billion.

China Merchants is also up-front about its desire to play a role in China’s controversial “Belt and Road” initiative, which seeks to expand China’s overland and maritime trade links.

In its annual report, CM Ports said: “As for overseas expansion, by seizing the development opportunities arising from the ‘Belt and Road’ initiative promoted by China, the group reviewed its development strategy for its overseas projects and that of key overseas regions with a view to optimising the layout of its overseas operation.”

Professor Green acknowledged that Belt and Road – or “One Belt, One Road” – philosophies were now official Chinese policy, but that was not the case when China Merchants bought into Newcastle.

“China Merchants Ports prides itself on being a company that is listed on the Hong Kong exchange, with its own board of directors, its own shareholders, its own business plan and its own strategy,” he said. “It is operating successfully within the Chinese economic system but it is also a very globally oriented organisation and it would’t have the business it does around the world unless it was operating in a way that was consistent with western economic models and values.”

The Port of Newcastle’s chief executive, Geoff Crowe, said the Chinese owners were “extremely proud of the physical asset” they had bought.

He said the Novocastrian management team took business opportunities to the board for approval, with Chinese directors coming to Newcastle for board meetings.

In February, China Merchants Ports said the harbourside land that went with the Newcastle deal provided “opportunities for the company to further achieve its ‘Port and Park’ development” as part of its Port-Park-City model, which aimed to achieve a “port-centered ecosystem”.

Mr Crowe said CM Ports had developed ports in China as an economic stimulus to build surrounding towns but Newcastle was already a highly developed city. 

His emphasis, as chief executive, was to ensure that Newcastle remained a working port, and one that expanded into as many areas as it could, to diversify on top of its long-established coal business.

Although it was far from the only development in the port, a container terminal would be an ideal expansion and the best use of the vacant waterfront 80 hectares left from the former BHP steelworks site.