Allowing Chinese company Huawei to take part in the rollout of ultra-fast broadband could cause Western countries to be wary of sharing information with New Zealand, amid allegations the telecommunications giant has committed cyber espionage, a security analyst says.
Australia has shut Huawei out of its national broadband contracts following cyber attacks originating in China, and the United States has ceased doing business with the company due to high-level security concerns.
However, Huawei has signed deals with Enable Services and Ultrafast Fibre Ltd, the New Zealand Government's private partners for the ultra-fast broadband (UFB) scheme in Christchurch and the central North Island.
It has also signed a contract with Chorus to help roll out fibre lines in the rural broadband initiative.
Security analyst Paul Buchanan said the deal could potentially give the Chinese government the opportunity to tap into New Zealand intelligence systems, including Echelon - the world's most extensive eavesdropping system to which China is not privy.
"If the United States and Australia now believe that the Chinese have access _ or have the potential to engage in - electronic espionage on New Zealand directed at the Echelon system ... that may jeopardise the downstream flow of intelligence from the US and Australia to New Zealand,'' he said.
"The Americans in particular may say 'we can't trust them' and, let's be honest, New Zealand's internet security has been found wanting in the past - think of the (Murray) McCully emails that were just leaked and sent out.''
Mr Buchanan said the belief that Huawei was a private company with no connection to the Chinese government was "ludicrous''.
"There is no such thing as true private enterprise in China. If it is important, the Chinese state has a stake in it,'' he said.
Communications and Information Technology Minister Amy Adams told Radio New Zealand she was unable to make specific comments about security issues, "but what I can say is that we take the security of our network extremely seriously and that I'm very confident that we have robust processes in place''.
"Actually, (Huawei) is involved in a lot more rollouts than it's been excluded from. They are one of the largest telecommunications companies in the world so it would be unusual for them not to have some sort of involvement,'' she said.
Prime Minister John Key said on Monday the UFB contract with Huawei began before Australia's action against the company, but he was "comfortable with the current arrangements'' in New Zealand.
Mr Key said issues about Huawei had been raised and considered.
Huawei global head of cyber security John Suffolk told Radio New Zealand the idea that Huawei could use its UFB contracts to spy under everyone's noses was unrealistic.
"With these rollouts you do tend to find that it's more than one company involved so it's not just Huawei equipment - it's connecting to other people's equipment, so to say that you can snoop ... I think it's a hell of a lot more complicated than people think it is. That's a little bit James Bond-ey, to be honest.''
Mr Suffolk said Huawei had nothing to hide.
"We only write and design commercial equipment used by commercial operators ... and we're quite happy to be put through the most rigorous audit or inspection anyone can dream of.''
Mr Suffolk also questioned branding Huawei a "Chinese technology company''.
"When you begin to look at what technology is, you don't have a north or an east or a west or a south, you have a global technology supply chain. You unpick your iPhone or your iPad and you will find many different suppliers' components in that technology.''
The Labour Party's Communications and IT spokeswoman Clare Curran questioned why, if the Australians were concerned enough to ban Huawei from bidding for the broadband contract, had New Zealand allowed three taxpayer-funded contracts to go ahead without a more robust probe into the implications for the integrity of the network.
"How long have John Key and other ministers known about the extent of Australia's security concerns and what are they going to do about it? Just saying trust us, it'll be okay, isn't good enough,'' she said.
"Essentially our government is looking the other way and refusing to take a second look at the contracts that have been given to Huawei despite the intense public interest in this matter.''