"We must recognise that our economic choices have consequences for our security. Freedom is more important than free trade, the protection of our values is more important than profit," Stoltenberg told business leaders at the World Economic Forum in the Swiss resort of Davos.
"I am not arguing against trade with China, but I am saying that for instance, the control over 5G networks is of vital security importance," he said.
"We cannot say that in the interest of profits and free trade we just open up those networks also for suppliers that actually are not reliable when it comes to our security," Stoltenberg added.
On the Nord Stream 2 pipeline, designed to double the flow of Russian gas through the Baltic Sea directly to Germany, he spoke of a lesson learned.
Berlin halted the project when Russia formally recognised two breakaway regions of eastern Ukraine as independent, days before sending tens of thousands of troops into Ukraine in what Moscow describes as a "special military operation".
Stoltenberg said free trade had brought a lot of prosperity and wealth, but at a price.
"Because some of this trade, some of this interaction with authoritarian regimes, is undermining our security - and then we have to choose security instead of vulnerability and over-reliance on authoritarian regimes," he said.
"So this idea that we should have free trade in natural gas, meaning we can buy as much gas from Russia as we want, that's wrong, it's dangerous," Stoltenberg warned.
"It provides Russia with a tool to intimidate and to use against us, and that has been clearly demonstrated now, I regret to say."
The United States has long pressed European and other countries to exclude Chinese technology from 5G networks.
Washington sees Chinese telecom equipment maker Huawei HWT.UL as an arm of the Chinese Communist Party's global surveillance machinery.
Huawei, which is playing a leading role as the telecoms world gears up for next generation wireless technology, has repeatedly denied spying for the Chinese state.