New Zealand has suspended its extradition treaty with Hong Kong, saying it can no longer trust that the city’s justice system is independent of China.

Foreign Minister Winston Peters on Tuesday said New Zealand would also change how it controls the trade of sensitive goods – such as military technology or “dual-use” goods which could have military applications – with Hong Kong.

The suspension of an extradition treaty means New Zealand will no longer agree to deport any person to Hong Kong, if charged with a serious crime.

The Chinese Embassy in Wellington, in a statement, said New Zealand’s decision was “a serious violation of international law” and “a gross interference in China’s internal affairs”.

Foreign affairs officials had been reviewing New Zealand’s relationship with Hong Kong, after Beijing imposed a security law on the city which has been widely condemned for cracking down on democracy in the city and compromising a “one country, two systems” arrangement.

The law, a response to the city's ongoing pro-democracy protests, has allowed China to set up security forces in Hong Kong and prosecute both citizens and foreigners for crimes such as subversion of the government, or harming China.

New Zealand’s allies that are part of the Five Eyes security alliance – including Australia, United States, Canada, and the United Kingdom – have already taken similar measures, including the suspension of extradition treaties. Some have proposed “safe haven” visas for Hong Kong residents wanting to leave.

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Peters said that China had “gone against” its commitment to the international community by passing the security law, and has undermined the “one country, two systems” arrangement.

“I've always said that when we are given commitments by China I believe them, and I expect them to uphold their commitments. They could redeem the circumstance by going back to the commitments of 1997,” Peters said.

The “one country, two systems” arrangement was established by the 1984 Sino-British Joint Declaration, which established British-controlled Hong Kong would be returned to China in 1997 but that the city would retain some democratic and economic independence.

He had spoken to neither the ambassador of China in Wellington, nor China's foreign minister, Wang Yi.

"If he [the foreign minister] gave me a call I'd tell him tomorrow," Peters said.

New Zealand would now consider the export of sensitive goods to Hong Kong, such as military technology and duel-use goods, the same way it considers the export of such goods to China.

Advice to Kiwis thinking of travelling to Hong Kong was also updated on Tuesday morning. The Ministry of Foreign Affairs and Trade (MFAT) says there is now an increased risk of arrest and prosecution for a wide range of activities, including protest actions that take place outside of Hong Kong. There is a possibility anyone detained could be “removed to mainland China”.

“The maximum penalty under this law in Hong Kong is life imprisonment,” the advice reads.

MFAT officials will continue to review the relationship with Hong Kong, Peters said.

New Zealand was not considering "safe haven” visas, he said, and no Cabinet ministers had instructed officials to consider the prospect.

"We are dealing with a circumstance in this country, where there are going to be tens and tens of thousands of people potentially out of work, and we've got a huge economic criss that we're facing now,” he said.

Peters said New Zealand had not discussed suspending the extradition law with its Five Eyes allies, and he was not concerned about any trade retaliation from China in light of the decision.

"We have always taken our view as an independent country, that it should be the choice of the New Zealand Government, not some other government ... We've got to make sure our stance is independent.

"I'm not concerned about exports to China in that context, we are surely entitled as a democracy to have our views known."

The Chinese Embassy in Wellington on Tuesday afternoon issued a statement saying it had “lodged its grave concern and strong opposition” to New Zealand’s decision to suspend the extradition treaty.

“The New Zealand Government’s decision is a serious violation of international law and basic norms governing international relations. It is a gross interference in China's internal affairs,” the statement read.

“The Chinese side urges the New Zealand side to abide by the international law and the basic norms governing international relations, immediately stop interfering in Hong Kong affairs and China's internal affairs in any forms to avoid further harm to China-New Zealand relations.”

The extradition order New Zealand has suspended says that “each of the parties may suspend or terminate this agreement at any time”.