China and Cuba have secretly agreed to set up an electronic eavesdropping facility on the island approximately 160 kilometers (100 miles) from Florida, the Wall Street Journal reported on Thursday, citing U.S. officials familiar with classified intelligence.

Such a spy installation would allow Beijing to gather electronic communications from the southeastern U.S., which houses many U.S. military bases, as well as monitor ship traffic, the newspaper reported.

The U.S. Central Command headquarters is based in Tampa. Fort Liberty, formerly Fort Bragg, the largest U.S. military base, is based in North Carolina.

The countries have reached an agreement in principle, the officials said, with China to pay Cuba "several billion dollars" to allow the eavesdropping station, according to the Journal.

"I cannot speak to this specific report, but we are well aware of – and have spoken many times too – the People’s Republic of China’s efforts to invest in infrastructure around the world that may have military purposes, including in this hemisphere," John Kirby, spokesperson for the White House National Security Council, said in a statement.

"We monitor it closely, take steps to counter it, and remain confident that we can meet all our security commitments at home, in the region, and around the world," he said.

A spokesperson for the Chinese Embassy in Washington said: "We are not aware of the case and as a result, we can’t give a comment right now."

The Cuban government did not respond to a request for comment. But veteran Cuban diplomat Jose Cabanas, former ambassador to the U.S., wrote in a tweet that Washington was "trying to demonize Cuba again." He did not elaborate.

The agreement between the two U.S. rivals, both ruled by communist governments, has caused alarm in President Joe Biden’s administration, the newspaper said, posing a new threat close to America’s shores. The Journal said U.S. officials declined to provide more details about the proposed location of the listening station or whether construction had begun.

The reported deal comes as Washington and Beijing are taking tentative steps to soothe tensions spiked after a suspected Chinese high-altitude spy balloon crossed the U.S. before the U.S. military shot it off the East Coast in February.

It could also raise questions about a trip to China that U.S. officials say Secretary of State Antony Blinken is planning in the coming weeks. Washington’s top diplomat had scrapped the visit over the spy balloon incident.

Ties have deteriorated over disputes ranging from military activity in the South China Sea and near Taiwan to Beijing’s human rights record and technology competition.

‘Direct assault’

U.S. Senator Bob Menendez, Democratic chairman of the Senate Foreign Relations Committee and a Cuba hawk, said if the report is true, it would be "a direct assault upon the U.S."

"So I hope the administration will think about how they’ll react if it’s true," he told reporters.

A former U.S. intelligence official said on condition of anonymity that a Chinese listening post would be a "big deal," marking an expansion of Beijing’s spying capabilities and giving it access to signals intelligence as far north as Washington.

If such a facility is built, the Chinese will use Cuba "as a beachhead for collection against the U.S.," said a former senior CIA undercover officer Daniel Hoffman.

However, the U.S. has a long history of spying on China in its own neighborhood. It is widely reported to have used Taiwan as a listening post for the mainland and regularly flies spy planes in the South China Sea, angering Beijing.

The head of Taiwan’s National Security Bureau told the island’s parliament in April that Taiwan was conducting real-time encrypted intelligence sharing with Five Eyes partners, which includes the U.S.

A cash infusion would likely be welcomed in Cuba, where the economy is sputtering, and inflation, fuel shortages, plunging farm production and a cash crunch continue to fan discontent.

Relations between Washington and Havana remain strained. The Biden administration last year partially rolled back some Trump-era restrictions on remittances and travel to the island, but Cuban officials called the steps insufficient.

The intelligence on the agreement was gathered in recent weeks and was convincing, the Journal reported. The officials said it would allow China to conduct signals intelligence, including emails, phone calls and satellite transmission.

Cuba, an old Cold War foe of the U.S., has long been a hotbed of espionage and spy games.

The Cuban missile crisis 1962 began after Moscow began placing Soviet nuclear weapons on the island. It backed down and removed the missiles, but it is widely regarded as the moment when the U.S. and the Soviet Union came closest to a nuclear confrontation.

The Soviets installed a spy base on the island at Lourdes, just south of Havana, in the mid-1960s, with parabolic antennas aimed at Cuba’s northern neighbor. Russian President Vladimir Putin closed the facility in the early 2000s.