"The US practice has no factual basis, violates the principles of market economy and fair competition, and is a typical protectionist act," a ministry spokesperson said.
The proposed rule is part of President Joe Biden's hardening approach to the world's second-biggest economy and comes after an announcement in February of a probe into security risks posed by Chinese tech in cars.
Electronics are increasingly integrated into modern cars, which can connect to personal devices, other vehicles, US infrastructure and their manufacturers -- including electric and self-driving cars.
"China urges the United States to stop its wrong practice of generalising national security, immediately revoke the relevant restrictions, and stop its unreasonable suppression of Chinese companies," the commerce ministry said.
"China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies," it added.
The rule unveiled Monday by the American Department of Commerce covers the software and hardware that connect vehicles to the outside world.
The government did not specify which manufacturers or models are likely to be impacted by the rule, which will be open for public comment for 30 days.
The Biden administration announced this month a 100-percent duty on Chinese electric vehicles and other tariff hikes worth billions of dollars.
Both moves also triggered fiery responses from Beijing.
There are currently no Chinese-brand vehicles on sale in the United States.
US trade policy is one of the key issues in the White House race, which pits Republican Donald Trump against Democratic Vice President Kamala Harris in the November vote.
Trump took an aggressive stance against China during his presidency, introducing tariffs on imports of Chinese-made products.
Biden has essentially maintained those measures -- while also restricting exports to China of technology such as semiconductors and the machinery used to manufacture them.
The aim is to limit Chinese companies' access to cutting-edge equipment purchased abroad, particularly for military purposes.
Beijing on Wednesday condemned the United States for having placed "high tariffs on Chinese cars, restricted participation in government procurement, and introduced discriminatory subsidy policies".
"Now, on the grounds of so-called national security, it has slandered Chinese connected car software, hardware and complete vehicles as 'unsafe' and restricted their use in the United States," the spokesperson said.
This, they said, "seriously affects normal cooperation between China and the United States in the field of connected vehicles, disrupts and distorts global automotive industry and supply chains".
Related Links
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