"We believe that the US side should take an objective and impartial view of China's efforts (in fighting human trafficking) and stop making unilateral or arbitrary judgements of China," foreign ministry spokeswoman Hua Chunying said at a regular briefing in Beijing.
"The Chinese government always attaches great importance to fighting all crimes of trafficking," she said.
Moscow was also furious at the US report, which it decried as politically motivated.
"As far as the application of unilateral sanctions against Russia is concerned... The very idea of raising this issue causes indignation," the foreign ministry's human rights envoy Konstantin Dolgov said in a statement.
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They cooperate in some areas, such as pressuring North Korea to give up nuclear weapons. But in others, such as the Syrian civil war, Beijing and Moscow have been at defiant odds with Washington.
The US State Department on Wednesday downgraded the two countries, as well as Uzbekistan, to the bottom of a table on human trafficking.
The three nations had languished for years on the "Tier 2 Watch List", having been granted past waivers amid promises to do better.
President Barack Obama will determine whether to enact any sanctions against the three nations in September.
The report found that "trafficking is pronounced among China's internal migrant population" and "forced labour remains a problem, including in brick kilns, coal mines and factories".
China's one-child policy has resulted in "a skewed sex ratio of 118 boys to 100 girls in China, which served as a key source of demand for the trafficking of foreign women as brides for Chinese men and for forced prostitution".
Congressman Chris Smith, who has authored key legislation on trafficking, said China has become the "sex and labour trafficking capital of the world".