China is turning up the heat on New Zealand, threatening our booming tourism industry will take a lashing on the back of the Huawei saga.

An article published in the English version of China's People's Daily newspaper suggests New Zealand has fallen out of favour with Chinese travellers.

The paper, regarded as the mouthpiece for the Chinese government, quotes a traveller who saved more than $3200 to come to New Zealand but cancelled his plans.

Newstalk ZB political editor Barry Soper told Mike Hosking China knows that tourism is an important part of New Zealand's economy.

"The Chinese know where to hit and tourism is our big earner in this country."

"People are turning off New Zealand and for the first time in a long time, New Zealand is no longer in the top 10 tourist destinations."

Soper said the Chinese Government have a lot of power of where people travel to.

He said businesses are very concerned by the article.

Soper said the Government isn't being "transparent" enough over this issue.

"Winston Peters dismissed New Zealand businessman David Mahon's concerns...he [Mahon] is a 34 year veteran of living in China, in Beijing."

"However, Winston Peters says he [Mahon] doesn't have the direct links to the Chinese administration but Winston Peter says he does and it's business, as usual, this week," he said.

"Jacinda Ardern said the Huawei decision had nothing to the with her visit being given the cold shoulder by the Chinese."

"This is meant to be the most transparent Government we've ever had and clearly these are the factors behind the stand-off with the Chinese."

In the past week, the issue of New Zealand's deteriorating diplomatic relationship with China has exploded into the public arena.

The 2019 China-New Zealand Year of Tourism was also meant to be launched at Wellington's Te Papa museum next week, but that has been postponed by China.

We have had a "brilliant relationship" with the Chinese Government, Beijing-based Kiwi businessman David Mahon.

But he believes that in the last 12 months it has gone into reverse.

"So there is now a very different view, almost an opposite view of New Zealand."

What's caused that?

Rising tension between China and the US - the trade war and the stand-off over telco Huawei's ambitions to build the new 5G mobile network around the world have put New Zealand in a difficult diplomatic position.

And the messaging from the New Zealand Government has not been clear enough, he says.

The Government decision to exclude Huawei from Spark's 5G network tender process has now been qualified as a "concern" but it was initially presented as a "ban", Mahon says.

"And that's how it was taken in Beijing," he says. "We didn't have discussion with them over concerns. We announced this publicly and as a result they now feel they cannot trust us."

The Prime Minister has denied there is a serious diplomatic issue with China, although she has acknowledged challenges.

"Clearly there's a lot going on in this relationship that the government isn't telling us," Soper said.

"And we see last night that Hong Kong Airlines are pulling out of New Zealand in May and that's another kick in the guts for New Zealand by the Chinese.

"The Chinese are very good at targeting areas where they know it will hurt the most and the Huawei decision [has] obviously been a big issue for China."