Spy reports won't harm ties with China: Australia

Spy reports won't harm ties with China: Australia

SYDNEY (Reuter): Australia yesterday said its relations with China, one of its major trading partners, would not be harmed by media reports Australian spies had bugged the Chinese embassy in Canberra for the United States.

Australian Trade Minister Bob McMullan refused to give credibility to the spy reports, but said Australia's relationship with China was mature and would withstand such reports.

"I can't see on the face of it why this would affect one cent of our trade relationship," McMullan said in an interview from Manila with Australia's Channel Nine television network.

"When I come home I will have a look at those issues and see whether any trade implications flow from the allegations," McMullan said.

On Friday, Australian Broadcasting Corporation (ABC) television reported that Australian spies had laid a network of fiber optic listening devices throughout the Chinese embassy during its construction in the late 1980s.

Citing unnamed Australian intelligence sources, the government-funded ABC said the bugging operation was controlled by the United States National Security Agency.

The ABC report said the bugs relayed information from the embassy to a receiver at the rear of the neighboring British High Commission before being beamed direct to Washington.

The A$19 million (US$14 million) embassy, with its traditional Chinese sloping tiled roof, was opened in 1988.

On Saturday, The Sydney Morning Herald newspaper also reported the spying operation, but in more detail.

The Herald said intelligence sources told it that A$5 million ($3.6 million) was spent installing the bugs, in one of Australia's biggest intelligence gathering operations.

Both media organizations said the United States filtered the intelligence before relaying it back to Australia, sparking fears in the Australian intelligence community that the United States would have an unfair advantage over Australia in trade negotiations with China.

But McMullan dismissed such concerns, saying Australia and the United States were not major competitors for China trade and that only minor trade discussions would have occurred in the Chinese embassy.

McMullan said Australia and the United States only competed in some hi-tech, manufactured areas and not in Australia's major area of commodities, such as wool and coal.

"I can't see that there's anything but the most marginal opportunity to get a trade benefit, if such an event were to occur," McMullan said.

"I wouldn't have thought you'd invest much money to get that sort of benefit."

Australia's prime minister and foreign minister have both refused to comment on the spy reports, while officials from the Chinese, United States and British embassies in Australia have been unavailable for comment since the ABC defied government attempts to muzzle it and broadcast its report.