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Australian Prime Minister Malcolm Turnbull: "Media reports have suggested that the Chinese Communist Party has been working to covertly interfere with our media, our universities and even the decisions of elected representatives right here in this building.

Stop at once publishing wrong remarks that can damage mutual political trust and mutually beneficial cooperation between China and Australia", he said.

Fears centre around politics in Western Sydney and a Chinese diplomat who defected to Australia told The Weekend Australian there were overt attempts made by the Chinese government to influence opinions.

The Chinese Embassy in Australia issued a statement on Wednesday accusing Australian media of fabricating stories about the Chinese government, as well as insulting the Chinese community.

The Australian Security Intelligence Organization (ASIO) said one of those candidates was elected to office and is now still there, reported The Weekend Australian on Saturday, Dec. 9. "Such remarks simply cater to the irresponsible reports by some Australian media that are without principle and full of bias against China", Geng said at a regularly scheduled briefing.

Mr Geng said the Prime Minister's comments "poisons" the relationship between Australia and China.

'That they politically support the Chinese government does not equate them to being spies'.

The senator also received negative press recently over a 2016 speech when he publicly backed Beijing's aggressive moves in the South China Sea.

Australia was setting the terms of a "healthy and sustainable relationship" with China by introducing the foreign influence laws, he said.

Turnbull on Tuesday said foreign interference in politics would be outlawed under updated treason and espionage laws.

Chinese Foreign Ministry spokesman Geng Shuang said in Beijing he was "shocked" at what Turnbull had said.

The attention of Australian public over the past two weeks has been on the dealings between Australian Labor Party (ALP) senator Sam Dastyari and a Beijing-linked Chinese billionaire.

The Chinese government has accused Australian universities of treating foreign students like "cash machines" to pay off their study debts. He added that China's ultimate goal is to make Australia distance itself from the United States, thus bringing the age-old alliance to an end. "In 20 to 30 years time, we'll be a more diverse and multi-cultural population that will include Chinese and other ethnic components", Dr Davis said.

'China has no intention to interfere in Australia's internal affairs or exert influence on its political process through political donations, ' the statement read.