The government has its eyes wide open when it comes to China, Acting Prime Minister Winston Peters said.
Mr Peters comments follow a report by Stanford University's Hoover Institution, Chinese Influence and American Interests: Promoting Constructive Vigilance, which criticises New Zealand for not doing enough to counter Chinese influence.
"New Zealand's government, unlike that of Australia, has taken few steps to counter foreign interference in its internal affairs," the report said.
"Charity fund-raising, which has been used by Chinese United Front organisations to mask contributions, remains excluded from disclosure requirements.
"New Zealand's intelligence service still cannot investigate cases of subversion and foreign influence inside its political parties without the approval of the service's minister, whose political calculations may inhibit action.
Mr Peters said that he accepts the comments made in the report.
"When we came into government in 2017, on these issues we came in with our eyes wide open."
He said that the government has already taken action by implementing its Pacific Reset policy.
"That's why we've got the Pacific Reset, which is a huge turnaround in our approach to our neighbourhood and our engagement with it."
"We all need to understand the changed environment and the Pacific Reset had a proper, serious evaluation of that and that's why it's a very, very critical part of our present foreign policy."
However, he said the policy wasn't designed to counter the influence of China specifically.
"No, it's to ensure that the shape and character of our neighbourhood maintains the level of influence of countries who believe in democracy ... who believe in sovereignty and countries who have got the best interest of the neighbourhood in mind, not some wider and larger purpose."
Mr Peters said that he doesn't believe there will be any reaction from China on the Huawei ban.
The Chinese tech company Huawei's 5G technology has been banned after the Government Communications Security Bureau (GCSB) said it would raise a significant national security risk.
"This is a law that was passed by the National Party three years ago - this is part of a process - the first or primary step which was made by the GCSB was to put a serious question under that legislation - three-years-old - to Spark. It's the first part of a process and we don't know what the outcome is yet."
Mr Peters wouldn't say whether he thought China was becoming increasingly authoritarian.
"When the leader becomes what effectively looks to be the president for life, then that is a changed circumstance that would be naive not to understand."
"China's a one-party state - it's not a democracy".