A prominent Australian-Chinese businessman says China's security agencies have placed his family under surveillance in Sydney and imprisoned his brother in China because he has repeatedly refused to act as a spy for Beijing.

Michael Li, the owner of global furniture exporter OSMEN, said he has been routinely pressured by security officials to gather intelligence about the local activities of Falun Gong, a spiritual movement outlawed in China.

Mr Li said the officials had promised to financially support his business if he cooperated, but after he refused they forced the closure of his Guangzhou factory and placed him under increasing pressure.

"I think [the] Chinese government, their secret police, they have all agents here," he told ABC's Four Corners.

"They support a lot of business people here, including very successful people with businesses in Australia.

"Big business in China is impossible without government support."

Mr Li's story has been unearthed as part of a Four Corners investigation into the flow of billions of dollars into Australia from China.

Experts say a significant portion of this money is likely to be illicit and there is an opaque relationship between major Chinese businesses and the Chinese government.

Mr Li had kept the alleged harassment a secret, hoping to protect his family and his business.

But he has decided he has no choice but to speak out: "We don't want to tell people for so long, but now if I keep silent, I think more people will be persecuted."

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Mr Li is afraid for his family back in China, none of whom were aware he planned to speak publicly about the case.

Last year, his factory in Guangzhou was closed after his brother, Junda 'Richard' Li, was suddenly arrested on VAT tax fraud charges.

The ABC has independently confirmed his incarceration, and that his trial has yet to be heard, but neither his lawyer nor an officer at the Sihui Detention Centre, where Richard Li is being held, would comment on the case.

An officer at the jail said: "We can't reveal any information, since you are not a direct relative, it is an ongoing case, we can't reveal any information."

Four Corners has also been shown video evidence which suggests the factory is not operational.

'I live in Australia, I [am] still under China's police control'

Mr Li said he believes the prosecution is an attempt to intimidate him into cooperating with security agencies.

He said early last year Guangdong tax officials warned dozens of Mr Li's suppliers to stop doing any further business with the company.

"They called a meeting to tell them this is a political case," he said.

"In China, if you're involved in a political case, you're finished. So everybody will follow what they're told.

"They want to destroy my business because they're afraid I'll financially support Falun Gong."

Mr Li said he believes he has been under surveillance by Chinese authorities in Sydney for at least two years.

"We keep silent, we try to let it go for so long, so many years, until now my brother [was] arrested, my factory closed, this is the bottom," he said.

"It's unbelievable that even I live in Australia, I [am] still under China's police control ... [there's] nowhere to go."

Events came to a head on June 12 this year when his home on Sydney's north shore was broken into.

Mr Li woke to find the back door of his house wide open but nothing had been stolen, according to a report he filed with the New South Wales police.

His parents, who were visiting at the time, told him they had heard a male voice downstairs but had retreated to their bedroom in fear.

"That morning when I came down, I saw the back door is open and the other things the same as normal ... My mother told me the story [of the alleged intruder], then I was shocked."

Security officials threaten force if Li does not cooperate

Mr Li first fled to Australia in 2000 after being investigated for practising Falun Gong.

But after he returned to China on an Australian passport in 2004, he said he was repeatedly approached by security officials who demanded he act as an informant on the spiritual movement and its practitioners in Australia.

The approach was made through his father, a former senior Communist Party official, and began in a friendly manner.

"He say if you can work for us and you're a businessman, you know, and they talk like this, you become our people," Mr Li said.

"I think financially we can get support from them, they can give you more business. But I don't want to be involved there. I don't want to be controlled by them."

After he rebuffed several similar entreaties during his repeated visits to his family, he said the tone changed.

"So at the last meeting I went to see them and in one of the hotels, he said: 'OK, we, my department, is making friends, OK? We want to make friends with you and if you don't want to cooperate with us to be friends, I have to pass you to another department. The other department is not friendly, they use force'," Mr Li claims they told him.

'Chinese police travelled to Australia to pursue investigations'

Four Corners has confirmed Mr Li was expelled from China in 2005.

There have been numerous reported cases of Chinese agents covertly pursuing expatriates.

In August, The New York Times reported the Obama administration had rebuked China for sending covert agents to the US to "strong-arm" former Chinese citizens, including by threatening family members back in China.

In a written statement, the Australian Federal Police said: "In December 2014, the Australian Government became aware that Chinese police officers had travelled to Australia to pursue investigations without permission from Australian authorities."

"The Australian Government told the Chinese government that the actions of the police officers was unacceptable.

"The Government has been assured by Chinese authorities that this will not happen again."

The Chinese embassy declined to answer questions from Four Corners about Mr Li's case or the activity of their agents on Australian soil.

Watch The Great Wall of Money on Four Corners on ABC at 8:30pm.