Luxon was speaking from Niue on Tuesday, day one of his first trip to the Pacific.
He would meet with Premier Dalton Tagelagi to celebrate 50 years of Niue's self-government in free association.
Niue has a similar arrangement to the Cook Islands and Tokelau - as a country with free association within the realm of New Zealand, its citizens are also New Zealand citizens.
New Zealand also provides aid to Niue and assists it with its affairs.
Luxon was talking up that support when he referred to a "more contested geostrategic environment" across the Pacific.
"What we really want to do is support - we are part of the Pacific family as you well know and really we want Pacific solutions to Pacific challenges.
"We've got a lot of great power competition moving into this part of the world ... you can't have economic prosperity without security, and equally you don't get security if you don't have economic growth and prosperity as well."
When asked which powers he was worried about, he kept things vague.
"Well, I mean, I just say to you it's contested, and again there's lots of powers that are involved here in the Pacific, again what we support is actually the Pacific Island Forum."
Reporters pushed him on which powers he might be referring to, but he only said "just, great power competition, as I've said. There's increasing levels of geostrategic competition coming into the Pacific as has been well identified".
Asked directly if he was referring to China, he said there were "a number of powers that are doing more activity within the region".
He rejected the suggestion he was afraid to say 'China', saying: "No, no, there's as I said more geostrategic competition whether it's China, whether it's the US, whether it's other powers as well".
"But this is the Pacific family and we prioritise the centrality of the Pacific Island Forum, we want that to be the regional architecture that deals with challenges in the region."
Earlier this afternoon, Luxon arrived in Niue on a New Zealand Defence Force Boeing 757 which landed on the recently upgraded runway at Hanan International Airport, which New Zealand contributed to.
He would attend a King's Birthday Reception at Niue's official residence.
On Wednesday, Luxon will take a tour on a search and rescue vessel along Niue's western coast, as well as getting a brief introduction to the Niue Assembly Chamber and attend the official opening of the airport runway resurfacing.
He will then travel to Fiji.
