Mr Obama, who visited Darwin exactly four years ago to announce the repositioning of US marines and military aircraft in Australia's north, said he remembered the paper for "putting me on the front page with a crocodile". The paper greeted Mr Obama with a front page story about the NT government offering him crocodile insurance during his visit.

At no stage during the conversation did Mr Obama request that the port lease deal be unwound.

However, after revelations of ties between the Chinese company that bought the port, Landbridge Corporation, and the People's Liberation Army, the deal has sparked a new focus on Chinese investment in critical infrastructure as bids close on the $9 billion sale of the NSW electricity grid and an associated optical fibre network which is used by defence bases and data centres.

Labor and independent Senator Nick Xenophon have this week both flagged the possibility of a Senate inquiry into the purchase of national strategic assets by companies owned by foreign governments.



Federal Treasurer Scott Morrison said late last week the government was 'acutely aware of the sensitivities regarding foreign investment in strategic national assets and critical infrastructure' and that the government is assessing options to 'strengthen the federal government's ability to protect the national interest in these cases'.

Neither Mr Obama nor Mr Turnbull referred specifically to the issue in their public statements to the press following their meeting which occurred on the sidelines of the Asia-Pacific Economic Cooperation summit in Manila, The Philippines.

Barack Obama made front page news in the NT News when he visited four years ago. Supplied

South China Sea

They both mentioned "regional issues" had been discussed and singled out their common position regarding the threat posed by China to freedom of navigation and maritime rules in the South China Sea.


"Since neither of us are claimants in some of the controversies that are taking place in the South China Sea, it's, I think, very important for us simply to uphold the basic principle that these issues should be resolved by international norms and rule of law, and peacefully settled," Mr Obama said.

Mr Turnbull said "we are very much of the same mind".

"We are committed to the rule of law, to ensuring that the big changes in this region occur in a peaceful manner and in accordance with international norms. That's absolutely vital for the continued peace and security of our region," he said.

Richard Armitage, a former United States Deputy Secretary of State, told The Australian Financial Review on Tuesday he had been "stunned" that Australia blindsided the US on the decision.

US officials only heard about the deal last month as they were returning from the annual Australia-US consultations on foreign affairs and defence. Since Mr Obama's 2011 visit, Darwin has become an important staging post for US Marine deployments in the region in the past three years.

The port deal has split opinion within the community of defence establishment and defence analysts.

Department of Defence secretary Dennis Richardson has publicly defended the decision, saying Defence did not have any security concerns about the sale of the port to Chinese interests, on the basis that it was a commercial port, not a naval base.

Others say the argument over practicalities of the port overlooks the broader strategic question of China's ambitions in the region.

Writing for the Australian Strategic Policy Institute's Strategist blog, analyst Geoff Wade argued "Darwin is intended to be a key link in China's new 21st Century Maritime Silk Road, providing Chinese access to both the Indian Ocean and the South Pacific, as well as to Indonesia and PNG"

"This in turn will facilitate contention for regional and then global primacy with the United States. The PLA sees one of its key roles as being to protect these economic initiatives offshore. The Darwin deal is thus, among other things, a key element in the PRC's efforts to weaken the Australian alliance with the US. For these reasons there must be great security concerns about the Darwin deal."