“New Zealand can no longer trust that Hong Kong’s criminal justice system is sufficiently independent from China,” Peters said in a statement.
“If China in future shows adherence to the ‘one country, two systems’ framework then we could reconsider this decision.”
Beijing imposed new legislation on the former British colony earlier this month despite the protests of Hong Kong residents and Western nations, setting the financial hub on a more authoritarian track.
Australia, Canada and the U.K. all suspended extradition treaties with Hong Kong earlier this month. U.S. President Donald Trump has ended preferential economic treatment for Hong Kong.
Peters said New Zealand will treat military and dual-use goods and technology exports to Hong Kong in the same way as it treats such exports to China as part of a review of its overall relationship with Hong Kong.
Travel advice has been updated to alert New Zealanders to the risks presented by the new security law, he added.
In a website statement, the Chinese embassy in New Zealand called the decision a violation of international law and gross interference in China’s internal affairs.