Top defence figures warn further similar deployments by China's powerful navy should be expected.
A Chinese naval task group sailed within 10km of Australian waters late last year, the ADF chief told federal politicians.
Admiral David Johnston was yesterday quizzed about how close the naval flotilla - first reported to be in the Philippine Sea in November by The Australian Financial Review - sailed to Australia's exclusive economic zone.
It came almost 10 months after another Chinese task group circumnavigated Australia and launched live-fire exercises in the Tasman Sea that were first discovered by a commercial airline pilot.
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The warships' presence raised concerns about the ADF's ability to defend the country's vast eastern coastline.
Replying to Liberal Senator Jessica Collins in Senate Estimates, Johnston said the Peoples Liberation Army - Navy (PLA-N) warships detected in November came within five to seven miles (about 8km to 11km) of Australian waters.
He said the ADF had a "good understanding" of the flotilla's daily movements as it sailed through the Pacific islands before steering north through Papua New Guinea waters. It did not conduct live fire exercises.
"We had our own aircraft deployed into the Western Pacific, but a combination of means that enabled us to have an understanding of what the task groups' movements were."
Johnston also said the flotilla's deployment so far from the Chinese mainland reflected the increasing capability of the PLA-N, which has undergone a massive expansion and modernisation.
"It's a demonstration of its ability to operate much further from China's shores than it has routinely done. It unquestionably is demonstrating into our region that the Chinese navy is capable of deploying," he said.
"We judge the nature of its activities was both for internal training purposes as well as signalling to Australia and our region the capacity the Chinese military has."
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