New Zealand Names Chinese Observatory in Espionage Assessment

New Zealand’s domestic intelligence agency says China is the only country it has detected conducting espionage in the country “at scale.” The agency also named the Chinese Academy of Sciences’ Purple Mountain Observatory, alleging that it worked through a New Zealand company to advance a ground-based space project capable of collecting intelligence with military value.

Director-General of Security Andrew Hampton made the assessment in the agency’s annual security threat report released this month. Several countries collect intelligence in New Zealand, he said, but only China’s activity met the agency’s description of operating at scale. The public report did not disclose the number of operations, identify suspected participants or explain the threshold behind that term.

Purple Mountain Observatory contacted a New Zealand company as it sought to establish ground-based space infrastructure in the country. NZSIS assessed that the local company may not have understood the project’s full purpose. The equipment could support scientific research and satellite tracking, but could also collect information of military value. The project was later stopped. The report did not name the company, identify the proposed site or say when the parties were in contact.

New Zealand amended its law in 2025 to bring satellite communications, tracking and space-surveillance equipment under a licensing regime. Operators were required to obtain authorization by July 29, 2026. Because antennas, radars and optical equipment can serve both civilian and military functions, reviews examine who ultimately controls a project and where its data will go. When the government proposed the rules, it said foreign entities had concealed affiliations while trying to deploy infrastructure that could support foreign military activity.

In March 2024, New Zealand publicly attributed a 2021 intrusion into the Parliamentary Service and Parliamentary Counsel Office networks to the Chinese state-sponsored group APT40. In June this year, New Zealand joined its Five Eyes partners in a warning that Chinese military intelligence services were using job platforms and professional networking sites to approach people with access to sensitive government, defense or commercial information. China rejected the allegations, accusing the Five Eyes countries of manufacturing a “Chinese spy threat.”

The Chinese Embassy in Wellington also rejected the latest assessment. According to Reuters, the embassy said the report was steeped in Cold War thinking and lacked a factual basis, and portrayed the allegations as political activity influenced by outside powers. Responding to the Five Eyes warning in June, the embassy called the claims “smears and slanders” serving a political agenda.

NZSIS has not released the material underpinning all of its assessments and says the public cases represent only a small part of the activity known to the agency. Public information does not independently establish whether Purple Mountain Observatory carried out espionage or whether any of the equipment entered New Zealand. No court has ruled on the allegation.

The transition period for New Zealand’s ground-based space infrastructure regime ended on July 29. Operators that continue to run covered equipment need government authorization, and applicants must provide information about their partners and corporate relationships. The government has not said whether the Purple Mountain Observatory proposal entered the licensing process. China has denied the allegations; as of publication, New Zealand had not announced a related diplomatic protest or legal proceeding.

Reporting note: This article is based on the NZSIS annual threat assessment, Ministry of Business, Innovation and Employment rules for ground-based space infrastructure, public responses from the New Zealand and Chinese governments, and Reuters reporting. Classified material supporting the intelligence assessments has not been released. Allegations are described as assessments, claims or attributions rather than established judicial findings. Sources were checked through August 17, 2026.