The annual report by the Congressional-Executive Commission on China said the country has tightened restrictions on civil society, rights advocates, journalists and religious organisations. It added that President Xi Jinping has adhered "to the authoritarian model of his predecessors" since taking power last year.
That model "poses a serious challenge to U.S.-China relations and China's own development," the report said. It recommended that the US press for more freedoms in China, including by looking at how it issues visas to Chinese officials.
The independent committee is mandated to issue the annual report but does not have power to set policy.
Human rights advocates have denounced what they say is a crackdown on dissent by China's government that has swept up advocates for minority groups, pro-democracy lawyers and others. The report listed several dissidents who have been imprisoned, including scholar Ilham Tohti, who has defended the Uighur minority group and was sentenced to life in prison last month on separatism charges.
The Chinese government did not immediately respond to the US report.