Labor has taken a much stronger position on the South China Sea than the Coalition. After China rejected The Hague's ruling against its claims to sovereignty over disputed islands in the South China Sea, Labor's previous defence spokesman Stephen Conroy accused China of aggressive bullying and urged Foreign Minister Julie Bishop to authorise the Navy to join the US and sail over the areas China claims.

Now it can be revealed that on June 17 in the lead-up to the July election this year Senator Dastyari assured the Chinese community he would respect China's stance on the South China Sea, according to articles in the Chinese media.

"The South China Sea is China's own affair. On this issue, Australia should remain neutral and respect China's decision," he said.

Also speaking at the Sydney press conference beside Senator Dastyari was political donor and philanthropist Huang Xiangmo, who The Australian Financial Review reported on Tuesday had complained that Australian MPs were not delivering on donations from the Chinese community. He suggested the Australian Chinese community should use political donations to satisfy their political requests.

Huang Xiangmo and Sam Dastyari at a press conference for the Chinese community in Sydney on July 17, 2016. Supplied

Mr Huang has previously paid a legal bill for Senator Dastyari.

Senator Dastyari urged Australia to drop its opposition to China's "Air Defence Identification Zone" (ADIZ) over contested islands in the East China Sea, according to an article from 2014 – a stance which saw Julie Bishop publicly rebuked while on a trip to China by the nation's Foreign Minister Wang Yi.

"The Australian government must abandon its hostile stance on the ADIZ," Senator Dastyari is quoted as saying.


Further, a staffer to Senator Dastyari, Paul Han, who resigned from his office to run for a Senate position in NSW for the Labor Party in the recent election, effectively echoed the Chinese government's position on the South China Sea in a statement he sent out to the Chinese community in July which was then reported in Chinese media.

"[The dispute] in the South China Sea should be settled between neighbouring countries through friendly consultations. External interventions will not solve the issue and will only complicate the issue.

Neutral stance

"The Australia government should keep a neutral stance on this issue and urge neighbouring countries in the South China Sea to solve the differences between these countries by friendly consultation."

Rory Medcalf, head of the National Security College at the Australian National University, has previously told The Australian Financial Review that the ultimate aim of Chinese soft power and donations was to shift Australia's government away from the US and make us less likely to oppose China in the South China Sea.

"The long-term goal is to make Australia less likely to oppose China in regional confrontations," he said.

In a statement to The Financial Review Senator Dastyari said he supported Labor's position on the South China Sea.

"There is no difference between my position and Bill Shorten's position on the South China Sea – the best outcome is one where the rule of law is recognised. That was also the position of Senator Conroy when he was previously the shadow defence minister."


He said he did not agree with Mr Han. "Paul's comments are in his own capacity as a Senate candidate. They are not my views."

Mr Huang, who heads up the Yuhu Group, has donated to both parties and donated hundreds of thousands to the Liberal Party according to the latest declarations.

Ambassador Berry said he was worried countries which did not value a free press were increasingly involved in media in Western countries.

"They do not share a core value of freedom of the press and yet somehow they're getting involved in the United States in terms of acquiring papers and acquiring television and playing roles that we have to be careful of," he said at a National Press Club address.

"If that money directly is coming from the Russian government and being funnelled through a Russian-American then we might have some issues ... nothing is ever hurt by increased transparency and increased sunlight and disclosure."