MELBOURNE (REUTERS) - Australian Prime Minister Scott Morrison said on Monday (Nov 25) that allegations in a media report that China had tried to install an agent in a parliamentary seat in Canberra were "deeply disturbing and troubling".

The Australian Security Intelligence Organisation, in a rare public statement, said it was already investigating the allegations reported by Channel 9 television, adding that it was taking the matter seriously.

"I find the allegations deeply disturbing and troubling," Morrison said at a media conference, noting that ASIO's investigation was ongoing.

"Australia is not naive to the threats that it faces more broadly," he added, without commenting on the specific allegations.

The spy agency issued the statement late on Sunday (Nov 24) after allegations were aired on Australian television that a suspected Chinese espionage ring offered A$1 million (S$930,000) to pay for a Melbourne luxury car dealer, Mr Bo "Nick" Zhao, to run for a seat in Australia's federal Parliament.

"The reporting on Nine's Sixty Minutes contains allegations that ASIO takes seriously," ASIO director-general of security Mike Burgess said in the statement.

"Australians can be reassured that ASIO was previously aware of matters that have been reported today, and has been actively investigating them," he said.

Officials at China's embassy in Canberra were not immediately available for comment.

Mr Zhao told ASIO about the alleged approach from another Melbourne businessman about a year ago, the Sydney Morning Herald said in the joint report with 60 Minutes and The Age newspaper, citing Mr Zhao's associates and Western security sources.

Mr Zhao was found dead in March in a Melbourne motel room.

Mr Burgess said he would not comment further and that the matter was subject to a coronial inquiry. He said he was committed to protecting Australia's democracy and sovereignty.

"Hostile foreign intelligence activity continues to pose a real threat to our nation and its security. ASIO will continue to confront and counter foreign interference and espionage in Australia," his statement said.

Resource-rich Australia's ties with its most important trading partner China have deteriorated in recent years, amid accusations that Beijing is meddling in domestic affairs.

The latest allegations followed separate reports that a Chinese defector who said he was an intelligence operative gave a sworn statement to ASIO detailing how China funds and conducts political interference in Taiwan, Australia and Hong Kong.

Responding to those reports, police in China's financial hub of Shanghai said last Saturday that the "so-called China spy" was a 26-year-old convicted fraudster from the eastern province of Fujian.

Wang's account sparked an angry reaction in the influential state-owned tabloid Global Times on Monday, which said: "Chinese people would intuitively know that Wang sounds like an opportunistic liar, probably a swindler."

The newspaper said someone of Wang's age would have been "in a training or intern programme" if they were in the national security department.

It added that it was very rare for a person in China's national security establishment to have a child at such a young age. "If Australia's intelligence agency really believed Wang, it would have taken secret counter-espionage actions instead of letting the media expose it," the Global Times said.