The two nations have a free-trade agreement and China's Foreign Ministry said it hoped "New Zealand will offer a level playing field for Chinese enterprises operating in New Zealand". But over the past year under liberal Prime Minister Jacinda Ardern, New Zealand has pulled back somewhat, embracing a warmer relationship with Japan and putting resources into the Pacific, in part to counter China's growing influence there.
The private Chinese company was started by a former People's Liberation Army major in 1987. Along with the US, Australia, and some other countries, now New Zealand has also joined the club.
"While we are disappointed with this decision, we are confident that the decision will not affect our plans to launch Spark's 5G network by 1 July 2020, subject to the necessary spectrum being made available by the New Zealand Government", Spark said in a statement.
"This means Spark can not implement or give effect to its proposal to use Huawei RAN equipment in its planned 5G network".
"Speaking to The Malta Independent at the time, a spokesperson for Parliamentary Secretary Silvio Schembri, who oversaw the signing of the MoU, said that "[they] can not comment on other countries' approach to Huawei". Spark said it would review the reasons behind the rejection before taking further action.
Australia had flagged issues with Chinese law that requires organizations and citizens to support, assist and cooperate with intelligence work.
"It's not about the country, it's not even particularly about the company, it's about the technology that is proposed", Mr Andrew Little, minister for the Government Communications Security Bureau (GCSB) intelligence agency, told national radio. "There aren't many other companies around the world that have their own political committees".
Britain's cyber-security agency has warned that it still has "technical concerns" over Huawei following growing United States calls for its allies to block the controversial Chinese telecoms giant from rolling out its network technology, amid espionage fears. The reports said Washington had "initiated an extraordinary outreach campaign" to halt Huawei's worldwide expansion by pressing its European and Asian allies to shun the company. "And it provides the capacity to conduct undetected espionage".
Mr Little insisted Huawei did not face an outright ban, saying Spark had the option of approaching the GCSB to see if there were ways to reduce the security risks.
A spokesperson for Huawei in New Zealand said: "Huawei is aware of Spark's statement, and we are looking into the situation".