China accuses Peter Dutton of 'fear-mongering' over Chinese spy ship off Western Australian coast

Prime Minister Scott Morrison said a Chinese warship off the coast of Western Australia has not entered Australian waters, as Chinese Foreign Ministry spokesperson Zhao Lijian says Defence Minister Peter Dutton should "not make sensational comments".

China's foreign ministry spokesman Zhao Lijian Source: AAP

The Chinese Foreign Ministry says the Chinese surveillance ship off the Western Australian coast is staying in international waters and obeying international law.

Spokesperson Zhao Lijian told reporters he had no information about the specific situation but said Beijing has not broken any rules.

"China always abides by international law and international practice," he said.

"The Australian politician concerned should view the situation with objectivity and calm, instead of making sensational comments aimed at fear-mongering."

The Chinese warship did not enter Australian waters, according to the prime minister.

Scott Morrison said the Chinese vessel, which was sighted on Friday at 6am, about 250 nautical miles northwest of Broome, had freedom of navigation.

The comments were made despite Defence Minister Peter Dutton claiming the incident was an "act of aggression" and the ship had crossed into Australia's exclusive economic zone.

However, Mr Morrison said Australian officials were keeping a close eye on the ship's movements.

"They're looking at us and we're keeping a close eye on them," he said in a press conference.

"This is freedom of navigation. They are able to be in these places, they're not in our contiguous zones or in Australian waters."

However, Mr Morrison noted it was unusual for a Chinese ship to be as far south as Exmouth.

"What these events highlight is the serious times in which we're living," he said.

"It's not the first time, it won't be the last time. I suspect we'll see it many more times, but they'll keep a close eye on us."

When asked whether the government had an "ulterior motive" in announcing the Chinese warship had been spotted, Labor Leader Anthony Albanese said though the party shares concerns about the presence of the vessel, they are more concerned about revelations regarding the AUKUS Alliance.

The Department of Defence confirmed the ship was a Dongdiao class auxiliary intelligence ship called Haiwangxing (Neptune), which was also spotted off the Australian coast last year.

The ship travelled down the west coast towards Exmouth before tracking east along the country's northwest coast.

Chinese navy vessels have been tracked off Australia's northern and eastern coasts several times in recent years. The same Chinese vessel monitored Australian navy exercises with the US military off the east coast last year.