The ABC’s Andrew Greene broke the story last weekend that a Chinese Navy electronic intelligence-gathering vessel had been spotted off the Queensland coast in the vicinity of the Talisman Sabre defence exercises, which it was almost certainly monitoring. Australia’s Department of Defence had earlier posted a captioned photograph of the auxiliary general intelligence (AGI) Type-815 ship, outside of Australia’s territorial waters but within its 200 nautical mile (nm) Exclusive economic Zone (EEZ) extending into the Coral Sea.

China’s People’s Liberation Army-Navy (PLA-N) has previously entered Australia’s EEZ, on one occasion approaching the 12 nm limit of the territorial sea around Christmas Island. This is the first time it has sent a dedicated platform to gather intelligence offshore. Such activity is perfectly legal under the UN Convention on the Law of the Sea (UNCLOS), but as the first instance of its kind for Australia, the incident has unsurprisingly attracted attention and triggered debate among experts as to its strategic significance, and how Canberra should respond.

Defence also released a short factual statement, including this comment: 'The vessel’s presence has not detracted from the exercise objectives. Australia respects the rights of all states to exercise freedom of navigation in international waters in accordance with international law.'

The 6000-ton, Type-815 Dongdiao-class AGI, one of six in service with the PLA-N, is purpose-built to intercept communications and other electronic signals. The 2017 iteration of Talisman Sabre was more complex and bigger than in 2015, including the largest set of amphibious maneuvres the ADF has attempted since the Second World War. This presented a tempting tactical intelligence target for China’s military, given its interest in high-intensity maneuvres among the US and its Pacific allies (New Zealand, Japan and Canada also participated at Talisman Sabre this year).

But it would be grossly mistaken to see the AGI’s presence as a reaction to a 'provocative' exercise. Talisman Sabre is a biennially recurring defence drill that takes place in northern Australia. It is no threat to China.

The incident has sparked some debate around double standards. The most obvious of these concerns China’s longstanding, vociferous objections to what it terms 'close-in surveillance' by the US Navy within China’s EEZ. Beijing maintains this is illegal, according to its maximalist, over-interpretation of UNCLOS.

Yet China already plays in the big league of blue water navies that operate dedicated ocean-going intelligence collection vessels (unlike Australia). Earlier this month, another Type-815 was deployed off Alaska, believed to be gathering signals from a test of the US’ THAAD ballistic missile defence system. China’s intelligence ships are regularly sighted near Japan, Guam and Hawaii. They regularly track US Navy movements and at-sea exercises across the Indo-Pacific, including at the RIMPAC drills, notwithstanding the PLA-N’s officially invited presence there.

Some Australian observers have lighted on comments, attributed in the ABC article to unnamed Australian defence officials, labelling the AGI’s presence as 'unfriendly' and 'provocative'. For them, this smacks of hypocrisy given the prevailing assumption that Australia and its US ally gather intelligence on China by similar technical means. Why, they ask, should China’s legal activities be singled out in hostile terms?

First, some good news. By operating overtly within Australia’s EEZ, China has set a clear precedent that Australian officials and senior naval officers can use to justify freedom of navigation and overflight within China’s EEZ and its more ambiguous claims to waters in the South China Sea.

This implication is surely not lost on the PLA-N leadership itself. Indeed, the PLA-N is on the cusp of becoming a global navy, with a corresponding interest in operational access to the world’s seas and oceans, almost half of which are subject to some form of jurisdiction (though with varying degrees of legitimacy). This developing national interest, over time, may incline China to a position of mutual tolerance regarding 'close-in' foreign military activities, as was the case for Soviet Union, pre-UNCLOS.

A sizeable PLA-N surface contingent is currently in the Baltic Sea for joint exercises with Russia, while China’s first overseas military base is about to become operational in Djibouti. The appearance of China’s AGI in the Coral Sea is but one movement on a geo-strategic chess board. If this was the first appearance of a Chinese intelligence-gathering ship off the coast of Australia, it will not be the last. The Australian public will have to get used to a regular PLA-N presence not only in its northern approaches, but also to the direct proximity of uninvited observers, on, below and above the water.

That said, don’t expect China to suddenly stop complaining about foreign powers engaging in military data-gathering, or FONOPs within areas it identifies as 'near seas'. It is likely that Beijing will continue to apply a double standard on UNCLOS for some time to come. Canberra will therefore need to demonstrate political will and initiative in asserting its own rights of access in the South China Sea, against a nationalistic backdrop of hostility and intimidation from Beijing. However, the principle of reciprocal access is something that will increasingly weigh on the PLA-N as it takes on more international responsibilities. Australia and its allies must make the most of this.

The presence of Chinese SIGINT vessels in the EEZ is legal, but it’s not something that ordinary Australians should be expected to welcome. It is not known how close the Type-815 came to Australia’s 12nm limit. For High Frequency signals, proximity matters less. But line of sight may be necessary to intercept UHF/VHF communications. That could have required the AGI to come within 30 miles of its intended target. Even if the vessel was collecting intelligence passively on Australian and US forces, it could still glean valuable insights for its electronic warfare effort, and possibly identify cyber vulnerabilities.

Does this constitute an unfriendly act? In legal terms, China was doing nothing illegitimate. Ocean-going navies have long collected intelligence on one another’s capabilities through overt and covert means. Military professionals on both sides understood this as a fact of life during the Cold War. But we are not in another Cold War with China, at least not yet. That makes for a potentially jarring contrast, in terms of public perceptions, with Australia’s investment of time and resources in building defence engagement with China, including a recent 'goodwill' visit by a high-ranking PLA political commissar, and a three-ship visit to Sydney by a PLA surface group designed to 'build trust'.

The appearance of a Chinese Navy AGI during Talisman Sabre is not all bad news for Canberra’s defence engagement with Beijing; it may even demonstrate some progress towards legal conformity and reciprocity in the relationship. But maintaining the smiles will prove harder in future.