ASIO Investigating Chinese Plot To Install Australian Political Candidate

The head of ASIO says he is aware of an alleged plot by China to infiltrate parliament by recruiting a businessman to stand as a Liberal Party candidate.

ASIO says it was aware and "has been actively investigating" allegations that a Melbourne car dealer was cultivated by the Chinese government in a bid to infiltrate Australia's parliament.

Nine's 60 Minutes program aired the claims on Sunday, citing sources with knowledge of the plot, where Melbourne car dealer "Nick" Zhao, 32, was allegedly cultivated by Beijing to run as a Liberal Party candidate.

Zhao allegedly told ASIO about the deal. He was then reportedly found dead in a Melbourne hotel room in March.

ASIO director-general Mike Burgess later confirmed in a statement the agency was aware of the claims but would not comment further.

"Australians can be reassured that ASIO was previously aware of matters that were reported today, and has been actively investigating them," he said.

"Hostile foreign intelligence activity continues to pose a real threat to our nation and its security.

"ASIO will continue to confront and counter foreign interference and espionage in Australia."

Federal Liberal backbencher Andrew Hastie says he was briefed on Zhao's death as chair of the parliamentary committee on intelligence and security.

"It was surreal, it was like something out of a spy novel happening in Melbourne with impunity," he told Nine.

Hastie says Australians should be "very concerned" about the alleged plot.

Liberal MP Andrew Hastie said he is concerned by the revelations. Image: AAP

"This isn't just cash in a bag, given for favours, this is a state-sponsored attempt to infiltrate our parliament," he said.

"Using an Australian citizen and basically run them as an agent of foreign influence in our democratic system. So this is really significant and Australians should be very, very concerned about this."

It is the second explosive allegation on the weekend of attempts by the Chinese government to influence Australian politics.

Nine newspapers reported on Saturday that a Chinese spy, Wang "William" Liqiang, provided ASIO with details of how China's senior military intelligence officers fund and conduct political interference operations in Hong Kong, Taiwan and Australia.

"I have personally been involved and participated in a series of espionage activities," Wang said in a statement to ASIO in October cited by Nine.