Australian and Chinese officials including Beijing's top army general had a "direct and blunt" exchange over the Asian giant's island-building in the South China Sea this week, Fairfax Media has learnt. 
China also cautioned countries including Australia against following the US lead in carrying out "freedom of navigation" exercises near Beijing's artificial islands to signal they do not recognise the territorial claims.
The dialogue between Australia's defence brass and General Fang Fenghui, Chief of the General Staff of the Chinese People's Liberation Army, sparked controversy this week because Defence failed initially to release any statement about the talks or inform the Australian media they were happening.
Yet the Chinese government informed their country's journalists in advance of the dialogue and provided a statement outlining the main points of the talks which were co-hosted by the Chief of the Defence Force Mark Binskin and Defence Department Secretary Dennis Richardson.
Defence also provided the Chinese Embassy, in advance, a detailed statement setting out details of the welcoming ceremony at Defence HQ. It included instructions on where the media should be positioned and other logistical details.
Fairfax Media has been told that officials had a "robust" and "direct and blunt" discussion on the South China Sea, one of the flashpoints in tensions between China and the US.
Beijing has provoked heightened tensions recently by building land on reefs that are normally submerged at high tide and constructing military-grade runways on the islands.
China argued it was doing the island-building for civilian purposes such as maritime rescues of fishermen in distress and counter-piracy operations. Australian officials openly stated they were sceptical of this, it is understood.
Officials discussed the recent patrol by the US destroyer the Lassen and Australia's support for that patrol, which was Washington's way to signal to Beijing that it has no territorial claim over waters surrounding the islands.
Australia and other countries such as Japan are weighing whether to reinforce Washington's gesture by carrying out their own patrols close to the islands.
The Chinese officials spoke in the Canberra talks against other countries following suit, it is understood.
Australia also stressed the importance of continuing US presence in the Asia region.
The two sides agreed to look at what more they can do together on counter-terrorism. A Chinese contract worker, Fan Jinghui, was publicly murdered by Islamic State fighters last month - the first time that has happened. China also lost one of its nationals in the Mali hotel attack.
Defence eventually released a statement on the 18th annual Defence Strategic Dialogue on Wednesday morning after media began reporting on the talks.
On Tuesday night, James Goldrick, a retired Royal Australian Navy officer who is an external adviser on the government's upcoming Defence White Paper, said the US had made "something of a hash of" the recent naval patrol.
Washington had taken the mildest possible approach by carrying out "innocent passage", sailing through as quickly as possible without conducting military manoeuvres or operating helicopters. This had "confused" the signal to Beijing, Mr Goldrick said during a panel discussion at the Australian Strategic Policy Institute.
He expected Washington would order further, more robust, operations.
"My personal view is that they made something of a hash of the first one," he said.
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