A Congressional report says Chinese telecom firms Huawei and ZTE are security threats.
Beijing on Monday urged Washington to "set aside prejudices" after a "We hope the US Congress will set aside prejudices, respect the facts, and do things that will benefit China-US economic cooperation instead of the contrary," said foreign ministry spokesman Hong Lei.
The draft report by the US House Intelligence Committee, obtained by AFP, said an investigation has concluded that the two firms "cannot be trusted" to be free of influence from Beijing and could be used to undermine US security.
It said US authorities "must block acquisitions, takeovers or mergers involving Huawei and ZTE given the threat to US national security interests."
The panel launched its probe over concerns that China could use the fast-growing firms for economic or military espionage, or cyber attacks.
Hong, however, defended the Chinese telecom firms.
"China's telecom enterprises have been engaged in international cooperation according to market economy rules and their investment has demonstrated the mutually beneficial nature of China-US economic ties," he said.