A White House-ordered review of security risks posed by suppliers to US telecommunications companies found no clear evidence that Huawei Technologies Ltd had spied for China.
Two people familiar with the probe told Reuters those leading the review concluded early this year that relying on Huawei was risky for other reasons, such as the presence of vulnerabilities that hackers could exploit.
The telecommunications giant has been contracted to upgrade New Zealand's broadband network.
In March, Australia barred Huawei from seeking contracts for its national broadband network due to cyber-security concerns and in October the US House of Representatives Intelligence Committee said the company may be a threat to security.
The findings of the 18-month review, previously unreported, support part of the US congressional report that warned against allowing Chinese companies Huawei and ZTE Corp to supply critical telecom infrastructure.
But they may douse speculation that Huawei has been caught spying for China.
It remains unclear whether security vulnerabilities found in Huawei equipment were placed there deliberately. It is also not clear whether any critical new intelligence emerged after the inquiry ended.
A spokesman for China's foreign ministry said the report proves again that allegations against Huawei are unfounded.
Intelligence agencies and other departments conducted the largely classified inquiry, delving into reports of suspicious activity and asking detailed questions of nearly 1,000 telecom equipment buyers.
A spokesman for Huawei said the company was not familiar with the review but it was not surprised that no evidence of Huawei espionage was found.
