The identities of 161 Australian citizens have been found in a hacked Shanghai security database.

Activists hacked the security database to shed light on China's development of a mass surveillance system.

Australian authorities are investigating whether the citizens have been flagged for monitoring by Shanghai's Public Security Bureau. 

The database includes watchlists, monitoring of ethnic minority Uyghurs, and the passport details of 5,000 foreigners. 

Internet 2.0 chief executive Robert Potter said the files appear to be a piece of a larger database feeding into a growing Chinese mass surveillance system.

"It demonstrates how China broadly seeks to control all data points within the enforcement of law and political control," he said.