An influential United States Congress hearing has been told "one of the major fundraisers for Jacinda Ardern's party" is linked to the Chinese Communist Party and it showed China had penetrated New Zealand's political networks.

As a result, US lawmakers needed to consider whether New Zealand should be kicked out of the Five Eyes intelligence alliance because of problems at its "political core".

The bombshell testimony included claims from a former Central Intelligence Agency analyst that "anything on China that was briefed to Bill English was briefed to Mr Yang Jian", the National MP revealed last year as having trained spies for China.

The hearing of the US-China Economic and Security Review Commission was aimed at gathering evidence on China's relationship with traditional US allies.


UN Senator James Talent - once touted as Donald Trump's pick for Secretary of Defence - raised concerns about "a sharp rise in political donations" from Chinese Government-backed bodies to political parties in Australia and New Zealand.

China's actions included getting people linked to the Communist Party or People's Liberation Army elected and had made it worth the while of political figures "to parrot its line on issues it deems important".

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"It's important for the United States to consider that China may be testing methods

of interference to probe for weaknesses in democracies in order to use the same techniques against Western countries in the future."

The hearing heard testimony from former CIA analyst Peter Mattis who said the Chinese Communist Party had worked "very close to or inside the political core" of Australia and New Zealand and "one of the major fundraisers for Jacinda Ardern's party has United Front links".

"That, you have to say, this is close enough to the central political core of the New Zealand system that we have to think about whether or not they take action and what kinds of action. What do they do to reduce the risk?"

However, he said New Zealand "have denied that there's a problem at all" and failed to follow Australia's lead in setting up an inquiry into China's activities.

As a result, he said New Zealand's Five Eyes' partners (Australia, Canada, the United Kingdom and the US) "need to have a discussion about whether or not New Zealand can remain given this problem with the political core".


He said "it needs to be put in those terms so that New Zealand's Government understands that the consequences are substantial for not thinking through and addressing some of the problems that they face".

National MP Jian Yang fronts media last year after it is revealed he taught Chinese spies.

New Zealand's membership of the Five Eyes has been considered by successive governments as a cornerstone of our security.

Prime Minister Jacinda Ardern said the Five Eyes relationship was strong.

"None of them have ever raised such concerns with me, nor have I heard that they've ever been raised with anyone else.

"Our intelligence agencies are constantly undertaking a wide range of investigative activity on foreign threats and we constantly review our safeguards."

Labour's General Secretary Andrew Kirton said the party followed the law on donations and had no idea which donor the Congressional testimony referred to.


"We have no knowledge whatsoever of what or who this is referring to."

Opposition leader Simon Bridges rejected claims Yang received improper briefings from the former prime minister.

He also said National followed the law on political donations and had seen no sign of improper influence.

"New Zealand has strong international relations and robust processes in place to ensure our political processes are completely independent of any other country."

Bridges said there should be no risk to the Five Eyes relationship.

National leader Simon Bridges - critical of government's relationship with the United States.

"What it does show, however, is a growing mistrust of this Government in the US. If New Zealand is being viewed with increasing mistrust by the US then the Prime Minister needs to get to work repairing what is an extremely important relationship to New Zealand."


NZ Security Intelligence Service director-general Rebecca Kitteridge said she would not reveal the areas on which spies were focused because it would harm their work.

"Investigating foreign intelligence activity and interference in New Zealand is a core function of NZSIS."

Academics focused on international relations and security were largely of the view it wasn't accurate to frame New Zealand as bowing to China's influence but that it was a perception the US was keen to push.

Canterbury University's Anne-Marie Brady, who published a paper last year warning of China's "soft influence" in New Zealand, said the commission was one of two forums in the US Congress which discussed the China issue, making the hearing and comments significant.

"It's very influential and authoritative. The issue of China's influence is a very hot topic in Washington at the moment."

Massey University's Professor Rouben Azizian said it would be naive for New Zealanders to believe an expanding power like China would be satisfied simply with trade.


"On the other extreme, we shouldn't become a toy for America's 'Great Game' in China."

Victoria University's Professor Robert Ayson said it was an "extraordinary statement" to suggest New Zealand's Five Eyes membership was in jeopardy.

He said there were those in the US keen on creating a Cold War-style conflict with China and casting New Zealand as bending under Beijing's power helped embed that narrative.

Also at Victoria University, Dr Van Jackson said care needed to be taken that New Zealand was not seen as sufficiently concerned about Washington's perceptions - even if those perceptions were not accurate.

Jackson, who has worked in the Office of the US Secretary of Defence, said responses so far pushed the line that "there's nothing to see here".

"That shows there is a problem. If [push back] is happening privately, then it looks like nothing is being done."


• David Fisher is a member of a Reference Group formed by the Inspector General of Intelligence and Security to hear views on issues possibly relevant to the work of the oversight office. The group has a one-way function in offering views to the IGIS. No information in this story was sourced from Reference Group discussions.