NZ spy agency disrupts Chinese observatory's satellite-tracking plan

New Zealand's domestic intelligence agency says it thwarted an attempt by a Chinese state-linked observatory to set up satellite-tracking equipment in the country, using a local company that was likely unaware of the hardware's military intelligence value.

The New Zealand Security Intelligence Service (NZSIS) identified Purple Mountain Observatory, a Beijing-affiliated research body, as the entity behind the effort. The agency did not name the New Zealand company involved or say how the plan was disrupted.

The case was highlighted in the NZSIS's annual Security Threat Environment assessment, released on Thursday, which described China as the only country detected conducting espionage against New Zealand "at scale."

Director-General Andrew Hampton said the threat environment had become even more challenging than in previous years, particularly for a nation of New Zealand's size and location in the South Pacific.

NZSIS said China's intelligence services posed the most active espionage threat, but cautioned that this should not deter legitimate trade or research collaboration. It urged an "eyes wide open" approach to overseas partnerships.

The agency noted that Beijing's national security laws could compel Chinese individuals and organisations to cooperate with intelligence requests, including handing over data, intellectual property, or system access. In the Purple Mountain case, NZSIS assessed that any data collected would have been willingly passed to the Chinese government.

New Zealand's position in the South Pacific makes it attractive for ground-based systems that track satellites, space debris, and other scientific data. The country is also a member of the Five Eyes intelligence-sharing alliance.

NZSIS said foreign states were targeting government agencies, companies, universities, and researchers for non-public information and innovative technology. Methods included cyber intrusions, recruitment of insiders, academic partnerships, front companies, and commercial intermediaries.

The assessment also flagged risks from geopolitical rivalry, technology and supply-chain competition, foreign interference in diaspora communities, and the use of artificial intelligence to spread polarising or deceptive content.