IN AUGUST last year, Victor Perton, then a Liberal member of State Parliament, sent an email to all 128 state MPs. It also ended up with an unintended recipient.

The email invited MPs to a briefing on a report, compiled by a former Canadian MP, on allegations that the Chinese Government was "harvesting" organs from executed prisoners.

Within hours, the Chinese Consul-General in Melbourne, Liang Shugen, had a copy of Perton's email.

According to Perton, Liang then composed his own email to state MPs, pressing them not to attend the briefing.

The consul-general's email "attacked me, saying I was misguided and people should not go to the meeting", says Perton, who retired from Parliament late last year. He says some MPs considered the Chinese diplomat's action an "outrageous interference" in the Australian political process and a breach of parliamentary privilege.

But Perton says there was something "more astonishing" about the whole episode.

"What was fascinating to me," he says, "was that one of my parliamentary colleagues would send my email straight to the consul-general, or the Chinese ambassador, or both."

Perton draws two lessons from the incident. One is the willingness of Chinese officials to stretch the boundaries of diplomatic behaviour to pressure an Australian parliament on issues sensitive to Beijing.

The other is a willingness by Australians in key positions to shield the Chinese Government from embarrassment over its well-documented record of human rights abuses.

Evidence compiled by The Sunday Age reveals that, in its relations with Australia, China uses its power to co-opt support and silence critics. Sometimes, it involves intimidation and threats.

In international relations, there is soft power and there is hard power. Exercising it is how governments get their way.

China's communist rulers are no different. They legitimately use soft power to win foreign friends and gain international influence. The tools of soft power are culture, education, public diplomacy, business links and people-to-people contacts.

Then there's hard power — overt pressure or threats. In China's case, its hard power carries more punch than most and, in relations with Australia, it's backed by lots of money.

Trade with China is essential to Australia's economic boom. China is set to overtake the US as our largest trading partner — our two-way trade with it is worth $50 billion, a 21 per cent increase on 2005-06.

Overseas students are now a key source of revenue for our universities and China is Australia's largest market for foreign enrolments. More than 90,000 Chinese students are studying here.

Other human links are expanding, too. Close to 310,000 Chinese tourists visit Australia every year. And the Chinese-Australian population is growing, with 690,000 Australians claiming Chinese ancestry, and people born in China forming the third-biggest migrant group.

Chinese authorities now have leverage they can exploit without overt pressure, according to Fraser Brindley, a Greens member of the Melbourne City Council.

Brindley says a widespread deference towards the Chinese Government was highlighted late last month, when the council rejected a proposed civic reception for the Global Human Rights Torch Relay because of its links to the Falun Gong spiritual movement, which is banned in China.

Brindley sees a simple motivation in the council's "pre-emptive kowtowing" towards China.

"I don't think there's any need for direct pressure, because councils and politicians are in such a frame of mind that they won't cause any offence to China," he says. "There's a lot of money wrapped up in the relationship with China, and 'fuzzy issues' like human rights are anathema to them."

In some cases there is direct pressure, as last August's email exchange to state MPs shows. And it wasn't an isolated case.

In 2003, the then Chinese consul-general in Melbourne, Junting Tian, was accused of trying to intimidate MPs after he condemned a pro-Tibet advertisement signed by state and federal politicians.

In a letter to the then upper house MP Elaine Carbines, he admonished her for "mobilising" support for the advertisement, which he said was "disrespectful" to Chinese President Hu Jintao on the eve of a visit to Australia.

A current state Labor MP, who asked not to be identified, says the intimidation continues.

This MP recounted how, at a dinner at the consul's Toorak house earlier this year, MPs were "directed" by the consul not to have any contact with Falun Gong and to ignore the Tibetan leader, the Dalai Lama.

"I was very offended by those comments," the MP says. "A number of my colleagues were similarly upset. It was put in terms of almost a directive. I thought he was very heavy-handed in the way he went about saying that.

"It was put to us on the basis that we would obey an instruction. The view seems to be that China is so important to us economically that we are prepared to ignore human rights issues."

The Chinese consulates in Queensland and NSW have issued similar warnings in letters to state MPs ahead of the visit of the Global Human Rights Torch Relay, which arrives in Melbourne this Friday.

The letter from the NSW consul is headlined in bold capitals "REMINDER", and it tells MPs not to attend or support the relay.

Victor Perton says many MPs don't need to be pressured or intimidated. He says some from both sides of politics are members of Chinese "friendship" groups and are seduced by "lavish" official hospitality on sponsored trips to China.

George Seitz, a state Labor MP, is co-chair of the Friends of China in Parliament group. He denies MPs are pressured, and defends the work of MPs who seek to widen links between Victoria and China.

"We speak our minds as we see things, and I'm a bit taken aback by (Perton's) comments," Seitz says.

Asked if his membership of the friendship group prevented him from commenting on human rights abuses, Seitz said he would speak out "if there's proof".

When The Sunday Age put to him that China's record of abuses was well documented by respected human rights groups, including Amnesty International, Seitz said this information "hasn't been brought to my attention, not with any proof".

Asked if he believed there were such abuses, he said: "No, I don't believe it, not until someone provides evidence to me."

Seitz, who says he is a member of Amnesty International, said none of the state MPs who had visited China in Chinese-sponsored delegations had seen any evidence of abuses.

He said he was aware of "anecdotal" press reports of a security crackdown in China ahead of next year's Olympic Games. He said he had discussed with the friendship group's co-chairman, Liberal MP Ken Smith, the need for a "briefing" from the Chinese embassy on arrangements for the Games.

Seitz said he had never been to China, but Smith is a regular visitor on sponsored delegations.

ACADEMIC sources have told The Sunday Age that Chinese students in Melbourne are sometimes pressed by consular officials to monitor the political behaviour of their fellow students.

A former student who was given such instructions declined to be interviewed by The Sunday Age, even anonymously.

"I'm still a Chinese citizen and my parents still live in China," the former student said. "It's very hard. If you speak out it requires a lot of courage. It's not so simple. The most important part of my life, my parents, are in China. If I become an Australian citizen, things will be different. But for now it's better for me not to say anything."

Dr John Fitzgerald, foundation professor of Asian studies at La Trobe University, is one of Australia's leading China experts. He's about to take up a post as head of the Ford Foundation's office in Beijing and declined to be interviewed by The Sunday Age.

But in 2005, in evidence to a Senate committee examining Australia's relations with China, he declared that Chinese official surveillance of Chinese-Australians was "extremely widespread".

"I can not go into greater detail simply for fear of placing at risk friends and acquaintances who are fellow Australians," Fitzgerald said.

China, he said, was not unique in using intimidation in business and trade issues to get its way. But what was unique was its surveillance of the Chinese community, whose family members back in China could be threatened.

Australian citizens of Chinese background "do not feel adequately protected by or recognised as equal citizens under Australian law when it comes to protection from surveillance by a foreign power, even though they are full and equal Australian citizens", Fitzgerald said.

This infringement of Australian sovereignty was "taking place on a very wide scale".

In an article published at the time of his Senate evidence, he questioned whether China's security network in Australia had spun out of control.

He believed the Chinese diplomat Chen Yonglin, who defected in 2005 and alleged China had 1000 informants in Australia, may have underestimated the actual number.

Targets of surveillance included democracy activists, academics, and Falun Gong practitioners. Surveillance was often carried out by tourists, but was cloaked in "plausible deniability', with threats issued through intermediaries, not directly from Chinese officials.

This meant Chinese officials could never be charged with exercising undue influence, while Australian authorities lacked any formal way of stopping it.

If the Chinese surveillance network in Australia has spun out of control, it's largely in response to the activities of Falun Gong, which the Communist Party sees as a threat to its power.

Ying Zhang seems an unlikely threat. She's 30, an accountant from Melbourne's eastern suburbs. But she says her involvement in Falun Gong and its newspaper, The Epoch Times, has attracted the attention of China's security agencies and threats to her parents, who still live in China.

Zhang arrived in Australia from Tianjin, Melbourne's sister city, in 2002. She has been a Falun Gong practitioner since 1996. She says the group's philosophy and meditation exercises have helped her to be "more calm and peaceful, more truthful, compassionate and tolerant".

She hasn't been back to China, but her brother, who is not in Falun Gong, made his first trip back in 2006 to visit their elderly parents.

"As soon as he came home three persons from the State Security Bureau came. They told him: 'Your sister is very active in Australia. Tell us what she is doing and we will look after your parents so they have no trouble with the police'."

Zhang says her brother returned to Tianjin again this year and again security officers called. It was obvious, she says, that they knew about her activities. This year her job has meant she has had less time for public Falun Gong activity.

"The same police came and they said to my brother: 'Your sister is not so active this year."' This indicates, she says, that someone in Melbourne is informing Chinese officials of her activities.

Her parents have never been arrested, but police periodically come to their home for "so-called visits".

Zhang is an Australian citizen. She insists she can be identified for this article.

"To deal with the devil, the best way is to expose them," she says. "The best thing is, not to keep it in the darkness."

Asked about the city council's refusal to have anything to do with Falun Gong, she says: "To (Lord Mayor) John So, I say every person faces a choice between trade and self interest, and human rights and human conscience."

Interviewed by The Sunday Age, So denied the council was under pressure not to offend the Chinese Government, and insisted the council's refusal to hold a reception for the Human Rights Torch Relay was consistent with its policy of non-interference in the "domestic politics of foreign countries".

"My belief is this torch relay is about foreign domestic politics," he said. While Falun Gong was welcome in Melbourne, the council had a responsibility to bring all of the city's diverse communities together.

"I believe local government should be only local; I don't believe it should be getting involved in foreign domestic politics."

As for claims of surveillance of Falun Gong, So said: "That is something that I'm not aware of."

Documents obtained under freedom of information by The Age's city reporter Clay Lucas, however, reveal the council has been under pressure from China on Falun Gong. The documents include 17 letters sent in an apparent orchestrated campaign by people purporting to be Chinese tourists who had recently visited Melbourne.

The similarly worded letters complained of harassment by Falun Gong practitioners while in Melbourne, and of "rude and impolite" Falun Gong propaganda.

They urged the council to take action to stop the practitioners. Some of the letters were accompanied by photos of Falun Gong members, taken in the Fitzroy Gardens.

The Sunday Age tried without success over three days last week to get an official Chinese Government comment on the allegations raised in this article.

There was no response to a message left with the spokesman for the consulate in Melbourne. An official there said the spokesman was not available and directed queries to the Chinese embassy in Canberra.

Repeated calls to the embassy spokesman went unanswered.

In November 2005, the Senate Foreign Affairs, Defence and Trade Committee reported on its inquiry into Australia's relationship with China.

In recommendation 18, the committee called on the Australian Government to place on the public record a statement "making clear that all people resident in Australia are entitled to the protection of its laws and to exercise their fundamental freedoms without interference from any individual, organisation or government".

In its response, the Government said its 2004 national action plan on human rights, and its obligations under international law, meant there was no question that all people in Australia were entitled to that protection and were entitled to exercise their freedoms without interference.

The Government response did not mention the word "China".

The ties that bind

PEOPLE

■In the the 2006 census, 669,890 Australian residents (3.4 per cent of the resident population) identified themselves as having Chinese ancestry.

■People born in China now form the third-biggest migrant group, after Britain and New Zealand.

■Chinese visitors to Australia rose by 8 per cent in 2006 to 308,500, making China our fifth-largest source of international visitors.

TRADE

■China overtook the US as our second-largest trading partner in late 2006, and is set to become our largest trading partner this year.

■Two-way merchandise trade with China reached $49.9billion in 2006-07, a 21 per cent increase on 2005-06.

■Our top six merchandise exports to China in 2006-07 were iron ore ($8.4 billion), wool ($1.7 billion), lead, zinc and manganese ores ($959 million), copper ores ($915 million) and coal ($507 million).

■In turn, our imports from China were worth $27.1 billion in 2006-07, led by clothing ($3.4 billion), computers ($2.8 billion), telecommunications equipment ($1.9 billion), toys, games and sporting goods ($1.4 billion) and furniture ($1.2 billion).

EDUCATION

■Australia's international education market is worth $10 billion.

■Chinese student enrolments in Australia grew by 10 per cent in 2006 to 90,287.

■China is Australia's largest market for international enrolments, providing 24 per cent of all enrolments.

The five poisons

In 2005, diplomat Chen Yonglin defected from the Chinese Consulate in Sydney.

He alleged that his work involved monitoring dissidents in Australia, and that 1000 spies worked for the Chinese government in Australia.

He was required to monitor the activities of "five poisonous groups":

■Democracy advocates

■Tibetan Buddhist followers of the Dalai Lama (below)

■Supporters of Taiwanese sovereignty

■Supporters of independence for Muslim Xinjiang

■The Falun Gong religious movement