US authorities have blocked a seven-year application from China Mobile to enter the domestic market, citing national security concerns that come amid rising trade tensions between the world's top two economies.
Commerce Department assistant secretary David Redl said that after "significant engagement" with the Chinese mobile giant, "national security interests were unable to be resolved".
His department's National Telecommunications and Information Administration also recommended that China Mobile's application to offer voice traffic between the US and other countries be rejected.
The move comes just days before the US is due to impose steep tariffs on billions of dollars in Chinese imports, which is likely to spark countermeasures from Beijing.
Asked about the move at a regular news briefing, Chinese foreign ministry spokesman Lu Kang said the US "should not speculate and repress Chinese enterprises in this way".
"We urge relevant parties in the US to abandon the Cold War mindset and zero sum game," added Kang, who also warned that China was "well prepared" if the US made good on its tariff threats.
"We will use a package of necessary measures to ensure our rights and interests," cautioned Kang.
Shares in China Mobile fell 2.01 per cent to HK dollar 68.30 in Hong Kong.
With economic tensions between the two superpowers rising, the Trump administration has also moved to punish Chinese telecoms firm ZTE, banning US companies from selling crucial hardware and software components to the company for seven years.
US officials imposed the ban because of what they said were false statements by the firm regarding the illegal sale of goods to Iran and North Korea. ZTE pleaded guilty to those charges in March last year and was hit with USD 1.2 billion in fines.
Last month the Trump administration gave ZTE a lifeline by easing sanctions against the firm in exchange for a further USD 1.4 billion in penalties, although the US Senate has defied Trump by voting to reimpose the ban.
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