New Zealand shied away from labelling China's treatment of its Uyghur Muslim minority genocide on Wednesday, once again leaving Wellington out of step with its more forthright Western allies.

Parliament unanimously passed a motion expressing "grave concern" at human rights abuses in Xinjiang province, but only after Prime Minister Jacinda Ardern's ruling Labour Party insisted any reference to genocide was scrubbed out.

Lawmaker Brooke van Velden said that, while allies such as the United States, Britain and Canada had called what was taking place genocide, it was "intolerable" that New Zealand refused to use the term to avoid upsetting its largest trading partner.

"The world is looking to us now to see what standard we are going to set -- can the CCP (Chinese Communist Party) play us off as the weakest link in the Western Alliance," she said.

"We may face the threat of loss if we speak our mind, but we face a much greater danger if we don't."

At least one million Uyghurs and people from other mostly Muslim minorities have been held in camps in Xinjiang, according to rights groups, who accuse authorities of forcibly sterilising women and imposing forced labour.

Van Velden, from the minor opposition ACT Party, received support on the genocide question from the Greens, who said it was "stunningly callous" to water down the condemnation of China's actions to maintain trade relations.

Jacinda Ardern's government has taken flak over its meek criticisms of China's rights record
Jacinda Ardern's government has taken flak over its meek criticisms of China's rights record AFP / Marty MELVILLE

"It's absolutely morally indefensible and a breach of New Zealand's legal obligations," Greens MP Golriz Ghahraman said.

Foreign Minister Nanaia Mahuta told parliament that New Zealand had raised its concerns about the situation in Xinjiang with China at the highest levels of government.

But she said Wellington only recognised a genocide when it had been defined as such by international courts, citing the Holocaust, as well as atrocities in Rwanda and Cambodia.

"We have not formally designated the situation as constituting a genocide, this is not due to a lack of concern," she said.

"Genocide is the gravest of international crimes and a formal legal determination should only be made following a rigorous assessment on the basis of international law."

Ardern this week conceded New Zealand's differences with China on human rights were becoming "harder to reconcile", but said her government would continue to point out areas of concern to Beijing.

Ardern's government has taken flak over its meek criticisms of China's rights record, leading to accusations New Zealand is a weak link in the US-led Five Eyes intelligence network.

The Chinese embassy in Wellington did not respond to a request for comment.