Yang was asked if he was aware while working as a lecturer he was teaching English to people training to be intelligence officers, so they could monitor communications.
"These universities they teach English language. Although after graduation they do those things, but for us it is just language.
"If you define those cadets or students as spies, yes, then I was teaching spies. If that is the case. I don't think so [they were spies]. I just think they are collecting information through communication in China. If you define that way, then they were spies. But for us, it was just collecting information."
Yang agreed when he was asked if his students were using the English they were learning to monitor the communications of other countries.
"If you say spying, then spying," Yang said, before National MP and party whip Jamie-Lee Ross cut in and ended the press conference.
Newsroom reported the NZSIS has scrutinised Yang over three years and interviewed a person about the MP last year. Several New Zealand politicians have been briefed by the NZSIS on its interest in Yang, according to the Financial Times, which was involved in the investigation.
Yang said he had never spoken to the NZSIS and wasn't aware of any enquires. For the record, he said he had never been a spy and the implication he had been was defamatory.
He said he had been transparent about his past and it was widely known in the Chinese community.
Yang moved to New Zealand in 1999 and taught international relations at the University of Auckland, after attending the Australian National University in Canberra in 1994. He entered Parliament in 2011.
National Party leader Bill English said this afternoon he had been aware for some time that Yang was involved in military intelligence when he lived in China.
"The National Party advise me he was quite upfront about his background there. You get to know people as MPs and I think from early on I've been aware that he had military training including military intelligence," English said.
"I also understand it was quite well known in the Chinese community as well. My sense is he's never tried to hide that background."
Earlier today, Yang said in a statement that he refuted "any allegations that question my loyalty to New Zealand".
"I have been nothing but upfront and transparent about my education and employment. Although I was not born here, I am proud to call myself a New Zealander, obey our laws, and contribute to this country," Yang said.
"I challenge those who are propagating these defamatory statements to front up and prove them. This is a smear campaign by nameless people who are out to damage me and the National Party 10 days from an election, just because I am Chinese."
Today, English said he would accord with long-standing Prime Ministerial practice and not comment on the operational matters of the NZSIS.
The National Party today released to media a CV it said was provided by Yang to New Zealand's Embassy in China in 2012, as background for a visit. It included his time at the engineering university and language institute.
New Zealand First leader Winston Peters said New Zealanders should be very concerned about Yang's background. He suggested the Labour Party had leaked details of Yang's background after "National's attempt to paint their leader as a socialist activist".
Labour leader Jacinda Ardern would not comment on the allegations today, saying she did not have enough information at hand to do so.
"That is an issue for the National Party to respond to and deal with. It's not something I want to comment on."
Yang was a member of Parliament's Foreign Affairs Defence and Trade committee from November 2014 until March last year. His is number 33 on the party list ahead of next week's election.
