New Zealand’s intelligence agency has warned the country is facing its toughest security challenges in decades, with foreign interference and espionage from states including China, Russia, and Iran.

In its annual Security Threat Environment report released on Thursday, the Security Intelligence Service (SIS) said there was almost certainly undetected espionage harming national interests. The agency highlighted that critical organisations, infrastructure, and technologies were being targeted to steal sensitive information.

“Some states, including China, Russia and Iran, are willing to engage in covert or deceptive activity to influence decisions or gain access to technology,” the report noted. It added that China has been “assertive and powerful” in the region, with both the capability and willingness to target New Zealand’s national interests.

The Chinese Embassy in Wellington dismissed the findings, calling them “unsubstantiated and groundless” and accusing New Zealand of adopting a Cold War mentality. It said Beijing regards Wellington as a partner, but would “take firm measures” to protect its interests if necessary.

The warning comes as New Zealand, a member of the Five Eyes intelligence alliance, commits NZ$2.7 billion ($1.6 billion) to strengthen its defence force amid rising regional tensions.

SIS Director-General Andrew Hampton said the threats “need to be taken much more seriously than they are currently,” stressing that the deteriorating environment has direct consequences for the country’s safety.

The report also flagged violent extremism as an emerging danger, with lone actors radicalised online seen as the most plausible threat. It warned that grievances and polarising debates in online spaces were “almost certainly” fuelling extremist ideologies.

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