If China's dictator-for-life Xi Jinping orders Huawei to support Chinese government spying, it's impossible to imagine Huawei resisting. The Chinese government flaunts its ability to detain anyone at any time for any reason.
The argument "no-one has caught Huawei doing anything wrong" (other than stealing technology) misses the point; the concern is about what they might do in the future.
The idea that you can buy equipment from Huawei today and protect it from future hijacking doesn't work. It will need to be maintained and upgraded by Huawei, which will let them add backdoors in the future even if there aren't any (accidental or deliberate) today.
Don't imagine you can inspect their systems to find backdoors. Skilled engineers can insert practically undetectable backdoors at many different levels of a computer system.
These same issues apply to other Chinese technology companies.
These same issues apply to technology companies from other countries, but New Zealand should worry less about technology companies from Western powers. Almost every developed country has much greater rule of law than China has; for example US spy agencies can force tech companies to cooperate using National Security Letters, but those can be challenged in court. We also have to weigh how much we fear the influence of different governments. I think New Zealand should worry a lot less about historically friendly democracies, flawed as they are, than about a ruthless tyranny like the Chinese government with a history of offensive cyberwarfare.
New Zealand and other countries may pay an economic price for such decisions, and I can see scenarios where the Chinese government decides to make an example of us to try to frighten other nations into line. Hopefully that won't happen and we won't be forced to choose between friendship with China and digital sovereignty — but if we have to pick one, we'd better pick digital sovereignty.
It would be easier for Western countries to take the right stand if the US President didn't fawn over dictators, spit on traditional US allies, and impose tariffs on us for no good reason.