Judith Collins believes China will likely retaliate against New Zealand with trade action over cyber accusation

The National Party is warning New Zealand will likely see retaliation from China after the Government's condemnation of the country.

New Zealand on Tuesday joined allies in criticising what is described as malicious state-sponsored cyber attacks by China around the world.

Collins said the country was vulnerable and it was important that the government worked to lift its readiness against cyber attacks.

"We've got a situation ... China is our major trading partner, it sets the world prices effectively for our dairy products, and our horticultural products - it is incredibly important to us.

"But at the same time we can't just lie down and let cyber attacks occur against our health organisations, government agencies and businesses, and sit there and say nothing."

She would not say if China was behind the Waikato DHB hack, instead saying: "It is my understanding they are responsible for quite a lot."

Collins said New Zealand needed to up its cyber security rating.

New Zealand has joined the US, UK, the EU, Britain, Australia, Japan and Canada in blaming Beijing for sponsoring cybercriminal activity around the globe.

"Quite obviously China is likely to take some form of retaliation against New Zealand where it comes to trade ... we most likely will see something.

"And I believe we will see that because of what's happened in Australia."

Collins also pointed to Australian and Canadian citizens who were being held in China "on what look like trumped-up charges".

"We should never underestimate how important this relationship is but also how serious the effects can be.

"New Zealand does have to stand up for itself but at the same time the best way New Zealand can do that apart from cyber security is to have more free trade agreements and to look for diversity in terms of our markets."

She said her party was supportive of the government trying to get a free trade agreement with the UK.

"If they can't get a free trade agreement with the UK in this environment, they'll never be able to get one."