New Zealand has sent a clear message to China: stop interfering or it will escalate its response, says an international relations expert.
The government has accused Beijing of being behind a successful hack of Parliament three years ago, when some MPs data was taken.
The US and UK have made similar cyber attack claims and begun filing charges and imposing sanctions on Chinese individuals and entities.
Otago University's Professor Robert Patman said New Zealand may have to follow suit if it finds more evidence of Chinese interference.
"That could have economic fallout down the road, but I don't think governments in this country have any choice," he said.
"They will not be prepared to water down our commitment to a pluralist democracy and institutions like Parliament if they find that they're being targeted."
The coalition government has said foreign interference of this nature was "unacceptable" and urged China to "refrain from such activity in future".
Patman said it was a fairly forthright response that he believed was proportionate to the situation.
"The government is trying to send a clear and public message to China that you must desist in this activity and if you persist then it will escalate the situation.
"No one is talking about sanctions against China at the moment, but if China was to repeat this performance then I'm not sure that could be ruled out."
China's embassy in New Zealand has called the accusations "groundless and irresponsible"; saying it never has and never will interfere in the internal affairs of other countries.
"They're not going to admit they're doing this," Patman said.
"China has to weigh up its its position. Does it continue to do this sort of thing despite warnings? Because if it does, it could compromise the relationship between New Zealand and China."
Opposition leader backs Government's call
Labour leader Chris Hipkins said he thought the Government had made the right call in naming China.
"I endorse the actions that the government took yesterday [Tuesday] I think that was an appropriate response."
He told Morning Report invoking sanctions would be a "pretty big step".
Labour leader Chris Hipkins on response to China's cyberattack
Hipkins said he was aware of the attack when it happened as he was Leader of the House at the time, he became aware that agencies believed China was behind it while he was prime minister.
He defended not naming China earlier saying it was a "pretty big decision".
"A lot of work went into making sure that our case was absolutely robust before we did that."
'This is one that got through'
Former Labour MP Andrew Little - the minister responsible for New Zealand spy agencies in 2021 - told RNZ "cyber warfare" had been happening for years, but this hack actually got in.
"Attempts to breach the cyber security of our public institutions, including Parliament, government departments and ministries, is happening all the time as a routine thing.
"This is one that got through and was then discovered."
The hack compromised Parliamentary Service, which provides admin and support services to MPs, and the Parliamentary Counsel Office (PCO) which is responsible for drafting and publishing legislation.
Spy agencies say a team of hackers known as APT40 is behind the intrusion that was quickly identified and contained with no loss of sensitive or strategic information.
Little narrowed the possible motives down to two options.
"Either, to get some specific information. That's less likely because I'm not quite sure what it is that PCO would have that's of huge interest.
"Secondly, and more likely, developing a capability, knowledge and understanding of the architecture of New Zealand government systems so that it can be used at some other point in the future."
The PCO and Parliamentary Service have made changes to their networks to increase their security resilience since the attack.