Editor's note: An earlier version of this story incorrectly stated that Huawei was banned from tendering for the New Zealand government. Huawei is in fact an active participant in bidding for government contracts in New Zealand and was not given a proper right of reply in the initial piece. Al Jazeera regrets the error.
New Zealand is on the verge of passing new legislation empowering its electronic intelligence agency, the Government Communications Security Bureau (GCSB), to carry out wider surveillance on its citizens.
If passed, the laws would allow the GCSB to covertly intercept citizens' internet communications, force internet service providers (ISPs) to provide port access to networks, and require technology companies to provide de-encryption keys to secure data.
This week, New Zealand's parliament is expected to pass the new spy laws by a margin of just one vote. The government is relying on centrist MP Peter Dunne, the leader of the United Future party, to vote in favour of the legislation.
Dunne initially had concerns that the legislation was too invasive, unnecessarily compromising the civil liberties of New Zealanders. But in July, the MP said he would vote for the bill after meeting with New Zealand Prime Minister John Key, who agreed to support changes suggested by Dunne.
While polls show the prime minister is popular, the mood inside New Zealand suggests the surveillance legislation is not. In July, thousands took part in nationwide protests, and a former High Court judge along with other prominent New Zealanders have argued against the proposed laws.
It is essential that an agency which is exercising intrusive powers has a clear legal framework to operate within.
Thomas Beagle, a spokesperson for civil rights group Tech Liberty, says, "We don't see a need for the GCSB to be given a new role investigating cyber-crime. Nor do we think they should have oversight and control of the implementation and operation of New Zealand's communication networks." Rather, Beagle said, the police "are the right body to investigate crime in New Zealand".
Given that New Zealand's GCSB shares its data with Five Eyes, an intelligence-sharing alliance between the US, the UK, Canada, Australia and New Zealand, Beagle asks, "Can we be sure whose side the GCSB will be on when it comes to protecting New Zealand communications from US spying?"
Prime Minister Key defended the proposed laws, saying, "In the real world, in New Zealand, there are people who have been trained for al-Qaeda camps, who operate out of New Zealand, who are in contact with people overseas, who have gone off to Yemen and other countries to train. I'm sorry, but it's the real world."
In a statement, Key said the country's pre-existing laws were difficult to interpret. This confusion, he argued, led to the GCSB operating illegally in New Zealand. "It is essential that an agency which is exercising intrusive powers has a clear legal framework to operate within."
A geopolitical fault line
The legislation would also grant the GCSB the power to approve or reject the sale of new electronic hardware. This power would likely be used to block Chinese hardware systems such as Huawei from being sold in New Zealand, says Dr Paul Buchanan, an analyst who heads 36th Parallel Assessments, a geopolitical consulting firm.
Western countries have been mounting pressure against Huawei since October 2012, when the US House of Representatives' intelligence committee warned US businesses against dealing with Huawei and another Chinese telecommunications firm, ZTE, citing an 11-month investigation that concluded their products were a security threat. There were concerns that the computers had backdoor vulnerabilities and "malicious circuits".
In March 2013, Washington required several government agencies to seek approval from law enforcement agencies before purchasing IT equipment from China.
Australia has banned Huawei from tendering on a major broadband project, and Canada and the United Kingdom have conducted investigations into Huawei equipment.
Buchanan believes that the push in New Zealand for new spying powers is designed to complement US attempts to contain China's influence in the Pacific. "The focus on the enhanced GCSB cyber-security role is clearly directed at Chinese cyber-espionage," says Buchanan, "which is a mix of corporate and traditional state espionage done via electronic means".
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He warns that New Zealand is stressing the limits of its "strategic balancing act" between the US and China. "The New Zealand government sees the balancing act as a good way of hedging its bets ... But even if that is the rationale, it appears to be based more on wishful thinking than sound strategic logic."
The Chinese embassy in New Zealand has not issued an official position on the bills, which come in the wake of revelations that New Zealand's biggest dairy company, Fonterra, had exported contaminated milk powder to China. In response to the scare, China's news agency Xinhua wrote, "Too often New Zealand's government appears to lay siege to perceived trade barriers, battering bluntly away until the doors swing open."
In 2008, New Zealand became the first OECD member state to sign a free trade agreement with China. Since then, though, New Zealand's security relationship with the United States has warmed. It has signed on to NATO security pacts, the diplomatic Wellington Declaration, and the bilateralWashington Declaration defence framework.
Ties between the US and New Zealand today, Buchanan says, indicate how the two countries - whose relations had been strained for many years - have become closer and how New Zealand's independent voice has been silenced. This rapprochement, he believes, has put stress on New Zealand's relationship with China, its second-largest trading partner after Australia.