A letter signed last month by 11 US industry associations, including the Software Alliance and Emergency Committee for American Trade, to several US officials said that "product security is a function of how a product is made, used and maintained, not by whom or where it is made."

The move sets "a troubling and counterproductive precedent that could have significant international repercussions and put US-based global IT companies at a competitive disadvantage in global markets," the letter warned. It called for greater global cooperation and collaboration to improve cybersecurity.

Some economists believed that it is unlikely for the US government to continue pursuing the policy next year, given the risks of further eroding the volatile Sino-US relations amid global economic jitters.

The US government should consider more constructive methods to handle the issue, because such kind of reckless action will bring chaos to international trade orders and put the interests of leading-edge US firms in peril, said Li Yong, deputy director at the China Association of International Trade.

Bilateral trade between the two countries reached nearly $500 billion last year, Chinese customs data showed.