The link between the defence scientist and the Chinese missile firm was revealed after Fairfax Media alerted a Chinese-Australian community figure and friend of the scientist to the man’s business dealings, which he had not disclosed to the Defence Department. After the revelation, the scientist quit the private firm. Fairfax Media is not publishing the scientist's name for security reasons and the man, who is an Australian citizen, said he was not authorised by Defence to answer questions. A Defence spokesperson said that a “review is under way of this matter” and Defence could not comment further. Fairfax Media has evidence that the scientist signed a deal with the subsidiary of CASIC in a ceremony attended by a senior CASIC official. However, he is understood to have said he was unaware his private business was working with the subsidiary, and Fairfax Media does not suggest otherwise. Nor does Fairfax Media suggest that the scientist has been involved in any wrongdoing. Loading

But the case raises questions about the adequacy of vetting at the Defence Science and Technology Group, which appears to rely partly on staff self-reporting any potential conflicts of interest after their initial vetting when hired. "Defence ... has policies in place to manage potential conflicts of interest, including requiring employees to disclose and actively manage actual, potential or perceived conflicts of interest," the spokesperson said. It is highly likely that Chinese authorities were aware of the scientist's role at the Defence Department, with a 2006 Chinese government publication noting that the scientist worked at the Defence Science and Technology Group, then known as the Defence Science and Technology Organisation. In the course of his work for the technology company and community groups, the scientist travelled to China on multiple occasions in recent years, where he met with local Chinese government officials. China's intelligence services are believed to be actively pursuing classified defence technology around the globe, as well as seeking to recruit academics and researchers, including those who are unwitting.

ASIO’s annual report last year highlighted that “foreign intelligence services are targeting a range of Australian interests, including clandestine acquisition of intellectual property, science and technology”. CSIRO Fairfax Media can also reveal how Australia's peak scientific research agency, the CSIRO, has spent tens of millions of dollars upgrading its cyber-security and information systems since a data breach linked to an employee who was a Chinese national. The man, who was employed by CSIRO, disappeared after the apparent breach in November 2013, which triggered not only the security upgrade but contributed to a major rethink of how Australia approached its relationship with China. In what is one of the more mysterious events in the relatively short history of cyber-espionage, government insiders insist the breach was serious, although details remain sketchy.

Clearer is the response from CSIRO and the police. "It appears to have been a wake-up call for the whole organisation [CSIRO]," wrote a senior investigator from the Australian Federal Police's high-tech crime division in a report obtained through freedom-of-information laws by Fairfax Media. Following the breach, CSIRO conducted an internal review of its cyber and general IT security, according to its annual report and then embarked on a major upgrade of systems. A central peg of this system involves the CSIRO's super-computer being housed within a facility owned by Canberra Data Centres, a storage facility which has been likened to the modern equivalent of Fort Knox. The police probe, detailed in FOI files, was prompted after a Chinese scientist stationed at the CSIRO’s Materials Science and Engineering department failed to turn up to work, causing panic among his colleagues.

CSIRO headquarters, Canberra. Credit:Katherine Griffiths The scientist was a post-doctoral student at the nanotechnology laboratory in Melbourne, which works closely with Australia's Defence Science and Technology Group. On November 22, 2013, a CSIRO manager sent an email to the scientist, saying: “We have noted that you have been absent from work since 18 November 2013. As we have not heard from you since Friday the 15th November, we are concerned about your wellbeing.” Three weeks later, on December 11, the Chinese scientist wrote back a three-line email advising he had returned to China. By then, the CSIRO had contacted the Australian Federal Police, who in turn contacted ASIO.

“It made us stand up and take notice as we had been briefed by the [intelligence] agencies several times about this sort of thing happening. Now it looked like it was the real deal,” a former AFP officer said. The briefings by ASIO to the AFP had covered several topics, the first being cyber-espionage.

“They are just hoovering up huge amounts of information from private companies and, where they can, government agencies,” says a former government official now involved in cyber-security. Another top former government official with knowledge of intelligence matters says the Chinese are far more aggressive in cultivating insiders. “They identify someone from China working in an Australian company or agency and they approach him and say, here’s 20 grand, can we have these documents? He might say piss off. Then they will go to another person and ask again. He might say yes, hand over the documents and then never deal with the agency again.” When the AFP was notified in 2013 by the CSIRO about the missing scientist, police began investigating wheher he had been working with the Chinese government to gain access to the CSIRO’s confidential research.

His Melbourne home was raided and his CSIRO colleagues were interviewed by members of the AFP’s cyber crime and organised crime divisions. Loading Documents also reveal that the CSIRO gave the AFP access to a shared “machine … used heavily by our research team” to see if it had been compromised by the scientist. The investigation ultimately yielded little hard evidence, and the AFP remains unable to say definitively whether the scientist was compromised or not. The man, after initially speaking informally to police, declined a formal interview and is now living in Europe. Eighteen months after it was launched, the AFP closed the file in July 2015 citing “insufficient evidence and [the Chinese scientist’s] reluctance to assist”.

New laws proposed by the government to target foreign interference and espionage also reflect concerns about technology theft, and introduce an offence of theft of trade secrets. Scientists with access to defence technology are often targeted by Chinese intelligence services when they visit China.