New Zealand’s security agency said it disrupted an attempt by a ‌Chinese state-linked observatory to install satellite-tracking infrastructure in the country, highlighting the case in its annual assessment of an increasingly dangerous espionage environment.

The New Zealand Security Intelligence Service (NZSIS) said Purple Mountain Observatory, an organisation based in China with close ties to the government ​in Beijing, had sought to install ground-based space infrastructure through a local company that was likely unaware ​that the equipment could collect intelligence of military value. The agency did not identify ⁠the New Zealand company or detail how the plans was disrupted.

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The warning appeared in the agency’s Security Threat ​Environment 2026 assessment, released on Thursday, which said China was the only country New Zealand had detected conducting espionage “at ​scale.”

“Our last report described the threat environment as being the most challenging of recent times,” NZSIS Director-General Andrew Hampton said.

“The kinds of malign behaviours and activities we have seen over the past 12 months are proving even more threatening for a country like ​New Zealand given its size and location in the South Pacific.”

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“There are several states that conduct espionage against New Zealand, but the People’s Republic of China (PRC) is the only country we have detected doing it at scale,” the NZSIS writes in its report (opens pdf).

“The PRC’s intelligence services may be the most active at espionage, but that should not prevent New Zealand organisations from engaging or doing business with entities in that country.”

The Agency says New Zealand businesses should “take an eyes wide open approach to espionage across all international markets” where they operate.

Risks can be managed in a way that ensures future prosperity and preserves New Zealand’s national interest, the report says.

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New Zealand’s location in the South Pacific makes it attractive ​for ground-based systems that track satellites, space debris and other scientific data, NZSIS said. ​It is ⁠also a member of the “Five Eyes” security grouping which includes the U.S., Britain, Canada and Australia.

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

It said geopolitical ​rivalry, competition over technology and supply chains, foreign interference targeting diaspora communities, and the use of artificial intelligence to spread polarising or deceptive ​content were compounding risks.

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