China has said a self-confessed spy who is seeking asylum in Australia is a convicted fraudster wanted by Shanghai police.

The Nine Network newspapers The Age and The Sydney Morning Herald reported Chinese defector Wang “William” Liqiang has given Australia’s counterespionage agency inside intelligence on how Beijing conducts its interference operations abroad. Wang reportedly revealed the identities of China’s senior military intelligence officers in Hong Kong, and provided details of how they funded and conducted operations in Hong Kong, Taiwan and Australia.

The Chinese Embassy on Sunday hit back at Wang and referenced a statement from Shanghai police, which said he was sentenced in Fujian province in October 2016 to one year and three months in prison for fraud, with a suspended sentence of 1.5 years.

It said he was wanted in relation to a fraud case from earlier this year.

“On April 19, 2019, the Shanghai police opened an investigation into Wang who allegedly cheated 4.6 million yuan [$653,482] from a person surnamed Shu through a fake investment project involving car import in February,” the statement said.

The embassy said Wang left for Hong Kong on April 10 carrying a fake Chinese passport and a fake Hong Kong permanent resident ID, adding that the Shanghai police were investigating the matter.

Explosive claims

Wang would be the first Chinese intelligence operative to blow his cover. He told the newspapers he faced detention and possible execution if he returned to China. He said he currently was living in Sydney with his wife and infant son on a tourist visa and had requested political asylum.

Wang claimed he was part of a Hong Kong-based investment firm that was a front for the Chinese government to conduct political and economic espionage in Hong Kong, including infiltrating universities and directing harassment and cyberattacks against dissidents.

Wang claimed he was involved in the kidnapping in 2015 of one of five Hong Kong booksellers suspected of selling dissident materials. The incident has been a reference point for protesters during the ongoing unrest in Hong Kong.

Using a South Korean passport, Wang also said he meddled in Taiwan’s 2018 municipal elections and claimed there were plans to disrupt the democratic self-ruled island’s presidential election in January.

Wang reportedly said he helped guide positive media attention toward certain Taiwanese politicians, including President Tsai Ing-wen’s top challenger, Han Kuo-yu from the China-friendly Kuomintang party.

The reports quickly provoked a strong reaction from both Han and his party, as well as Tsai and her ruling Democratic Progressive Party, which supports Taiwan’s formal independence, a red line for Beijing.

Speaking on a campaign stop in eastern Taiwan on Saturday, Tsai said China’s “shadow” was becoming more and more obvious, adding that Taiwan must not let China destroy its democratic values.

The Kuomintang called the reports in the Australian media “quite sensational”, adding it hoped the government did not use this to “play the fear of the communist’s card”.

For his part, Han told reporters he had doubts about what the defector was claiming, asking how the Kuomintang lost the last presidential election in 2016 if China really was swaying elections.

Australia reaction

Meanwhile in Australia, which relies on China for one-third of its export earnings but whose relations with Beijing have turned frosty for some time, Treasurer Josh Frydenberg told reporters that Wang’s reported claims were “very disturbing”.

“The matter is now in the hands of the appropriate law enforcement agencies,” he said on Saturday.

“The government makes no apologies for the strong measures that we’ve taken to ensure that we have foreign interference laws in place.”

Australian politician Andrew Hastie said on Sunday that Wang should be allowed to remain in Australia.

“I’m of the view that anyone who’s willing to assist us in defending our sovereignty deserves our protection,” Hastie told the newspapers,

Hastie, a vocal critic of Beijing, was banned from entering China last week along with another politician. He has previously said Australia’s sovereignty and freedoms could be threatened by Beijing.