She said it was important to strike a balance between naming large donors but making sure people could give smaller amounts "without being caught up in too much bureaucracy."
"When it comes to some of the issues that have been raised in Australia I haven't seen evidence of the kinds of issues they are talking about here in New Zealand. That's not to say we should be complacent.
"We have to be vigilant and we are."
Australian Prime Minister Malcolm Turnbull this week said he would introduce legislation to crack down on espionage and improper foreign influence within Australia's political system.
Turnbull said the new measures, which include a register of people working for foreign interests seeking to influence politics in Australia, were not aimed at any particular country - but China responded by declaring it does not interfere in the domestic affairs of other countries.
Canterbury University academic Professor Anne Marie Brady, internationally recognised for translating China's propaganda campaigns, said New Zealand's Government should consider following Australia's lead.
She said the Government should not engage in "head-butting" with China, but should strengthen its resilience against its interference.
"I am encouraging our Government to look at [what Australia has done]," she told the Herald.
She said foreign powers trying to influence other countries was not unusual, but the Communist Party's activities in New Zealand have been "very successful and very comprehensive" and were now at a critical level.
In a public lecture at Victoria University this week, she said China had several strategies, including:
• Managing Chinese communities overseas through Chinese media to make them agents of Chinese foreign policy.
• Managing public opinion through multiple platforms including social media.
• Co-opting non-Chinese political elites.
Brady said Labour MP Raymond Huo and National MP Jian Yang had been pushing the party's "United Front" strategy in New Zealand, including trying to influence Chinese-language media here.
Yang said he had no comment but Huo rejected being a part of the United Front strategy.
"Professor Brady's sweeping generalisation is unfortunate. There is a fine line between what she has alleged and the genuine promotion of the NZ-China relationship," Huo said.
Brady also said both parties had travelled to China and heaped praise on CCP general secretary Xi Jinping.
"These kind of political actions by our political leaders have a chilling effect on debates. Under Xi Jinping there's been a real increase in this kind of activity on a level we haven't seen before," Brady told the Herald.
"It has had a silencing effect in our universities and policy debates. It's created a situation where people are afraid to raise challenging issues to do with China within the state sector and within our universities. We should be able to raise a range of views on China, but mouthing the slogans of the CCP is not raising a range of views."
Brady raised questions about anonymous political donations and pushed for reform.
"We could look at countries like Norway and depoliticise the donation system and look at some kind of proportionality to remove any risk of political interference."
Brady published a policy brief in November highly critical of China's influence, adding that the SIS should follow the lead of Australian intelligence agencies in investigating China.
Justice Minister Andrew Little, who is also Minister for the SIS, said at the time that he was not aware of undue Chinese influence, but the justice and electoral select committee could look at the issue of donations as part of its review of the election.
When asked about Brady's brief, Prime Minister Jacinda Ardern avoided speaking about China, saying that it was always important to be vigilant about any foreign influence. She said New Zealand had a "strong" relationship with China.
