Australia's security intelligence organisation (ASIO) is recruiting fluent Chinese speakers to combat the increased number of Chinese spies in Australia. However US counter intelligence experts say the methods used by the Chinese Communist regime present a very different form of espionage that is difficult to contain.
According to a report in the Australian, Chinese-speaking officers are to be assigned to a recently formed counter-espionage unit, specifically to monitor the activities of Chinese spies.
The report claims Chinese spies now outnumber Russian equivalents circulating in Canberra intelligence circles during the Cold War.
Former CIA operative and later US Ambassador to China, James Lilley said the Chinese regime used very different techniques and were accordingly difficult to monitor.
Speaking on US news programme, Frontline, Mr Lilley said that only a small percentage of Chinese spies did "clandestine work". The rest, he said, gathered enormous amounts of bite sized information which were then assembled into a bigger picture.
"You don't find the case officer in a trenchcoat on the corner making a pass with an agent," he said. "What you find is the massive collection technique, the vacuum cleaner."
"And it's very frustrating for people…who are looking for the classical intelligence man." Former Chinese diplomat Chen Yonglin who defected from the Chinese Consulate in Sydney, May 2005, claimed that the Chinese Communist Party had up to 1000 spies working in Australia at that time but, to date, no one has been identified.
Counter intelligence expert, Edward Appel said it is very difficult to identify Chinese spies as most information is gathered on the basis of "interpersonal relationships" and "mutual obligation" with no exchange of money.
"They might get paid because they have a strong business relationship with the Chinese Government," Mr Appel told Frontline. "But they might not get paid specifically for the intelligence that they bring."
Mr Appel, who worked as an FBI special agent for over 20 years, said most Chinese intelligence was gathered from a large number of "overseas Chinese" and a small number of "non-Chinese".
While the Chinese Government has rejected the spying allegations, Australian Government sources said Australia was being aggressively targeted by Chinese agents, who were mostly operating undercover as diplomats or business figures.
Dan Stober, American author of a book on Chinese espionage, explained that Chinese agents target specific industries then work on building relationships with senior executives or experts in the field, particularly those with an ethnic Chinese background.
"If you are Chinese American," he said they would offer to move a relative to better accommodation in China or they would say things like "help the motherland. We're a poor country, America's a rich country. It's not going to hurt America to help us.
"And if that sort of technique gleans one piece of information, fine. Tomorrow there'll be another piece of information."
Another approach was to build relationships with Western industry leaders and experts by inviting them to China, Mr Stober said.
"After a long day at The Wall and a long banquet with lots of alcohol you find yourself in a hotel room perhaps surrounded by Chinese who are asking you lots of questions and implying that there's an obligation for you to answer."
According to The Australian report, the Chinese Government is particularly focussed on obtaining military related technology in Australia and strategic policy secrets.
Mike O'Dwyer, the Queensland inventor of the rapid fire gun, Metal Storm, told the Sunday TV programme last year that he had been courted by representatives from the People's Liberation Army with offers of over $100 million and an all expenses paid stay in Beijing in return for developing a Chinese equivalent to the highly effective gun. Mr O'Dwyer said that he had declined the offer but after reporting it to the Australian Government and receiving little response, he remained very concerned about China's endeavours to obtain the technology.
According to ASIO chief, Paul O'Sullivan, Australia's security agency has been allocated $642 million additional funding over the next five years and will increase personnel from 1200 to 1860 staff by 2011.
While much of the increased funding will be directed to counter terrorism, the extra resources devoted to Chinese espionage in Australia may take some time to produce results. According to T. Van Magers, a special agent with the FBI from 1969 to 2002, the nature of the Chinese regime's espionage makes it difficult to contain and the United States was still struggling to be effective.
"Our standard statement is, Chinese is different, and it is," he told Frontline "and because it is different it has made it a challenge for us to be successful.
"Ultimately we weren't successful in identifying a lot of their activities and a lot of their targets," he said, adding that Chinese espionage was so subtle it was often difficult to "explain and justify budget for continuing operations."
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