Chinese Embassy calls allegations against NZ Government staffer 'ill-founded', 'smear'

"An ulterior motive to smear and attack China, which we firmly oppose."
"An ulterior motive to smear and attack China, which we firmly oppose." Photo credit: Getty Images.

The Chinese Embassy in Wellington claims allegations a New Zealand Government staffer provided privileged information to China have "an ulterior motive to smear and attack China". 

Public Service Commission (PSC) analyst Yuan Zhao, who is also known as Jason, claims the New Zealand Security Intelligence Service (NZSIS) has accused him of passing sensitive insights and information to the Chinese Government

Zhao, who was suspended from the PSC after the allegations were made, has rejected them. He told Newshub he has no details of what exactly he is said to have done or when. He claims to have "done nothing against New Zealand" and called the allegations a "racist attack" on him.

A spokesperson for the Chinese Embassy in New Zealand on Thursday evening told Newshub the allegations are "ill-founded" and "with an ulterior motive to smear and attack China, which we firmly oppose".

"China opposes interference in other countries' internal affairs," the spokesperson said. 

"China has always encouraged overseas Chinese, either foreign citizens of Chinese descent or Chinese citizens living in foreign countries, and relevant China-affiliated institutions to strictly abide by local laws and regulations.

"It is also hoped that relevant foreign governments, including the New Zealand government will uphold their legitimate rights and interests and create a fair, just and non-discriminatory environment for them to live, work and study in their countries."

The embassy didn't answer questions about whether it had spoken with Zhao about the case or if it had made representations to the New Zealand Government about the situation. 

The NZSIS wouldn't comment on Zhao's case and has neither confirmed nor denied the accusations.

"The mission of the NZSIS is the protection of New Zealand's national security," a spokesperson said. "The NZSIS has a long standing approach of not discussing what may or may not be specific areas of operational focus or individuals."

They said anyone can complain to the Inspector-General of Intelligence and Security "if they consider that they have been, or may be, adversely affected by something done by the NZSIS".

Zhao's done that, and spies watchdog Brendan Horsley has confirmed to Newshub he is inquiring into that complaint. He wouldn't provide any further information due to privacy requirements, nor was a timeframe provided. 

Andrew Little, the Minister Responsible for the NZSIS, also wouldn't provide comment on Zhao's case. However, he told Newshub he has wider concerns about individuals in New Zealand providing information to foreign governments. 

"New Zealand is not immune to a range of national security risks. As the NZSIS have said previously, there are a small number of states that engage in interference activities against New Zealand's national interests. Insider threats pose risks to our national security and is an issue we take very seriously."

Chris Hipkins said it was also not the practice of Prime Ministers to comment on security agency investigations, but "where an issue is identified it is taken very seriously by the Government".

"Overall, foreign interference, clearly, globally is a much bigger issue now, certainly an issue people are much more conscious of now than they have been previously. I think there is some more vigilance towards that, that's probably a good thing."

Zhao has worked for a number of government agencies since arriving in New Zealand from China in 2000. That includes the Ministry of Business, Innovation and Employment (MBIE) and Education NZ. He became a citizen in 2006.

On October 20, 2022, Zhao, his wife, and his three children returned back to the Wellington International Airport after a holiday in Australia.

He told Newshub he and his family were "detained" by the NZSIS for an interview, with officials searching their luggage and phones. 

Zhao said he felt forced into agreeing to a voluntary interview. 

"The NZSIS officers threated (sic) me and said 'Do not tell anyone about this interview' and 'Don't worry, we can find you anywhere' several times," Zhao said. 

NZSIS officials asked him to "stop connection" with Chinese Embassy staff who he spoke with on the WeChat Chinese social media application, he said. 

"I deleted those connections from my Wechat. I can't have freedom of socialising with any person who works for the Chinese government."

Zhao told Newshub he knew a now-former staff member at the embassy as they both took their sons to table tennis training. He met another worker at the embassy as that individual took a Chinese government delegation to visit Education NZ's Wellington office when he worked there.

The NZSIS spokesperson told Newshub it doesn't have "enforcement powers and cannot detain or arrest anyone, or require them to speak to us". 

Zhao said that evening he was told he was suspended from the PSC as the NZSIS "informed them of a national security matter regarding me and the potential security risk to PSC".

He told Newshub the NZSIS accused him of having close personal relationships with members of the foreign government and disclosing privileged insights and information. Zhao said the NZSIS claimed his alleged history of providing information "poses an on-going risk to NZ's national security and insider threat risk to PSC".

He's called those allegations "nonsense" and a "racist attack". 

"I did not know it because the things NZSIS allegated (sic) I never did. I guess someone wants to clean the office as I was the only China-born Chinese person at PSC.

"I believe if I was a White or Māori person, NZSIS wouldn't search and detain my family and interview me at Wellington International Airport."

A lawyer for Zhao has submitted a personal grievance to the PSC and employment processes are now underway.

A PSC spokesperson said: "In accordance with standard security intelligence practice, we do not comment on individual security matters."

According to the NZSIS, an inside threat or insider "is any person who exploits, or intends to exploit their legitimate access to an agency's assets to harm the security of their agency or New Zealand".

This can be done "wittingly or unwittingly, through espionage, terrorism, unauthorised disclosure or information, or loss or degradation of a resource or capability".