China builds spy network in unis: report

China is reportedly building covert informant networks inside Australia's top universities, prompting Australia to strengthen its counter-intelligence capabilities.

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Fairfax Media reports that Chinese intelligence officials say they are building networks to monitor the ethnic Chinese community to protect Beijing's core interests.

Much of the monitoring work takes place in higher education institutions, it reports.

This includes Sydney University and Melbourne University, where more than 90,000 students from mainland China are potentially exposed to ideas and activities not readily available at home.

Fairfax said lecturers had been punished for comments made during a seminar about democracy which took place in Australian classrooms.

"I was interrogated four times in China," a senior lecturer at an Australian university said. "They showed me the report. I can even name the lady who sent the report."

An official from the Australian Security Intelligence Organisation said China had "more resources in Sydney University than we do...no question".