Chinese scientists who study topics sensitive to national security should be required to apply for a permit as part of a tightening of foreign interference laws, experts have warned.
As chair of the parliament's national security and intelligence committee Andrew Hastie weathers a storm of criticism for likening the rise of China to that of Nazi Germany, Australian Strategic Policy Institute director of defence, strategy and national security Michael Shoebridge said the furore was an easy way of avoiding a hard conversation about Australia's relationship with the country.
"He's being verballed with imagery he didn't use and unfortunately it's letting people debate something he's not talking about," Mr Shoebridge said.
Mr Shoebridge said the "nature" of the Chinese state could no longer be ignored.
"The Chinese state is a one-party authoritarian state ... which makes it an entirely different thing to engage with than our own government," Mr Shoebridge said
"It's not the goal of Xi Jinping and the Communist Party to ferment world revolutions and turn us into communists. The goal is to make the world safe for Chinese authoritarianism and the way Chinese engages with democracies like Australia is with that in mind, how they can marginalise critics of Chinese state policies in action."
Mr Shoebridge said it must be made clear people acting under the directions of foreign governments would be held accountable for their actions.
He said students who clashed with pro-Hong Kong protesters at a Queensland university should be prosecuted under existing foreign interference laws if the they were found to be acting at the behest of the Chinese consulate.
The "machinery" of the Foreign Investment Review Board should also be strengthened, with a "better balance" between economic and security concerns, he said.
And rules around universities collaborating with China needed to be tightened up.
"We need to say the end user [of the research] is really important, and if there's reasonable grounds to believe the end user will be the Chinese military or Chinese security, the research partnership should not go ahead," Mr Shoebridge said.
His comments come as the federal government considers whether universities should have to declare their relationships with Chinese institutions, including the Confucius Institutes.
Alex Joske, a researcher with the International Cyber Policy Centre within the Australian Strategic Policy Institute, said while it was illegal to export technology with sensitive military applications, there was nothing to stop scientists learning to build the same technology at an Australian university.
"It would be illegal for example for Australian scientists to ship certain satellite components to China without a permit but it's legal to train someone from China and give them the necessary knowledge to develop the same technology, there's no regulation of that," Mr Joske said.
"It's clearly a loophole that's being taken advantage of. We've seen 300 scientists associated with the Chinese military sent to Australian universities. There should at least be some effort to supervise or legislate on transfers of technology to members of foreign military within Australian borders."
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Mr Joske said introducing a permit system like the United States would be an "effective barrier" to prevent scientists taking what they've learned about super computers, navigation satellites, materials science back to their home military or security service.
"I think we have to have a robust discussion about where to draw the line. Everyone would agree that training a Chinese super computer scientist to might use a super computer to develop nuclear weapons shouldn't receive training for that," he said.
However Universities Australia chief executive Catriona Jackson said existing laws balanced "important national security considerations with the openness of our research system".
"Australian university academics collaborate with the best and brightest from across the globe as part of our world-leading research program," Ms Jackson said.
"Research collaborations provide huge social and financial benefits to Australia and the world."
Mr Hastie's comments exposed a deep divide in the Coalition over Australia's China relationship.
Trade Minister Simon Birmingham and Finance Minister Mathias Cormann rebuked Mr Hastie, while Home Affairs Minister Peter Dutton said his warning was legitimate, as the intelligence committee chair was "privy to a lot of information ... briefings that other members of parliament aren't".
Mr Joske said the federal government needed to develop a new policy on China.
"I think there's still a lot of contradictory grey elements in the government rhetoric on China. On one hand it's our largest trading partner but there's also substantial security tensions and I don't think the government's clearly charted out a path for the bureaucracy on how to navigate that," Mr Joske said.