New Zealand's government has for the first time pointed the finger directly at China's growing influence in the Pacific and joined Australia's outgoing Defence chief in criticising Beijing's militarisation of the South China Sea.

"Great power competition is back," New Zealand's Defence Minister, Ron Mark, told diplomats in Wellington on Friday.

"New Zealand values China and its relationship as a trading nation, but not we're blind to some of things we're seeing and we're not shy about discussing those matters [with them directly] ... That's what friends do."

Mr Mark's comments came at the launch of the overarching Strategic Defence Policy Statement released by New Zealand's Defence Force on Friday.

Among a plethora of other global and security issues, it paints a picture of an increasingly confident Chinese government.

While New Zealand has this year massively boosted its foreign aid funding - with the bulk going to Pacific nations - its top politicians have doggedly declined to specifically point to China and have appeared to take a softer than their American and Australian counterparts.

The new policy plan is candid by comparison.

"As China has integrated into the international order, it has not consistently adopted the governance and values championed by the order's traditional leaders," it reads.

"Both domestically and as a basis for international engagement, China holds views on human rights and freedom of information that stand in contrast to those that prevail in New Zealand."

And while noting New Zealand's defence and security co-operation with China had grown over the years, it also points to Beijing's increasing power in the Pacific.

"There are the issues of financial loans that bring with them, down the line, potentially other obligations. There is the issue of the South China Sea," Mr Mark told reporters.

But New Zealand had to take responsibility for foreign policy that had created a power vacuum in the Pacific, he said

Meanwhile, Australia's Air Chief Marshal Mark Binskin who retires as Defence chief on Friday, said China had lost of the trust of its Asian and Pacific neighbours with its aggressiveness in the South China Sea, and dismissed claims the military build-up on the Paracel and Spratly islands was for defence reasons.

Mr Mark on Friday said his government was not comfortable with the build-up.

The New Zealand report notes: "These posts now feature new radar and communications arrays, airstrips and hangars, deep water harbours, and weapons systems, which provide China with the ability to quickly deploy a range of additional capabilities in and around key international shipping lanes."

Media reports suggest Australia and New Zealand will in September sign a new security agreement with their Pacific island neighbours that could limit the military presence of China and Russia in the region.