Critics say this distinction is not meaningful when Chinese firms are concerned because most have some connection the Communist Party and the military. When the Northern Territory government signed the $506 million deal on the Port of Darwin with Landbridge, it was not given a full FIRB assessment because Landbridge is a privately owned firm. But the board did refer the deal to the Defence Department, which raised no concerns from a security point of view. A spokeswoman for the US Embassy in Canberra said, "Australia alone determines its criteria for foreign investment projects related to its infrastructure". Asked whether the US had raised concerns, she said: "I will not comment on this or any other matter specifically. As strategic allies, the United States and Australia discuss a wide range of topics."

Department head Dennis Richardson told a recent Senate estimates inquiry that the Army, Navy and Air Force, as well as the Australian Signals Directorate and the security and strategic sections of the department, had all scrutinised the deal. "No part of Defence had a concern from a security perspective in respect of the sale," he said. Treasurer Scott Morrison said the government was looking at how to strengthen scrutiny of key foreign investments and added the Darwin sale had happened under rules set by Labor. "The government is acutely aware of the sensitivities regarding foreign investment in strategic national assets and critical infrastructure. The government is assessing options to strengthen the federal government's ability to protect the national interest in these cases and we will have more to say on this issue in the future," he said. "The rules Labor had in place and that the shadow Treasurer presided over did not permit this particular transaction to come under FIRB's review."

Some experts have raised concerns. Peter Jennings, a former senior Defence official and head of the Australian Strategic Policy Institute, said he was puzzled that it had not been discussed with the US, given the growing relationship that centres on the Northern Territory with the growing rotations of Marines, which reached 1150 this year. "Based on what I know of our connections with the US, American officials would be astounded at this development and very puzzled about why Australia did no raise this issue with them." He said China could use the port for "espionage or sabotage" if the strategic situation deteriorated in coming decades. Shadow assistant defence minister David Feeney said that the National Security Committee of Cabinet should "consider the sale of the port of Darwin so that Defence and our national security agencies are afforded the opportunity to assess whether it's in the national and public interest". Geoff Wade, a visiting fellow at the Australian National University, wrote this week on the ASPI's blog site that the firm had extensive links to the Chinese military. A key figure in the firm, He Zhaoqing, is a former People's Liberation Army officer, he wrote.

But Landbridge hit back on Friday at claims of deep links between the firm and the Chinese PLA. In a statement the firm said its billionaire owner Ye Cheng had "never been in the military or the People's Liberation Army". It also stated that material on its website had been "misconstrued" and did not show "armed militia" as some had claimed, but rather company security staff who were being trained in firefighting. Follow us on Twitter