A United States Congress committee has claimed in a report that the Chinese tech firms Huawei and ZTE represent a 'national security risk'.
The House Intelligence Committee said in a draft of a report to be released on Monday.
Huawei and ZTE sell relatively few of their own branded mobile phones in the US, but are two of the world's biggest makers of components in mobile devices.
Globally, ZTE is the fourth biggest maker of mobile phones while Huawei is sixth.
In a draft of a report - seen early by Reuters but set to be released on Monday - the committee said that US intelligence should focus on the espionage 'threat' represented by Chinese tech companies.
It did not detail the threat in the unclassified version of the report, but said both firms should be stopped from acquiring companies or merging with US businesses.
"Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," the report said.
The panel investigated Huawei and ZTE for 11 months before making its recommendations, but it said both companies had failed to deliver requested information including those which detail its relationship with the Chinese government.
It said it had heard testimony or seen evidence which implicates both companies in bribery and corruption, though no such allegations have been made public or proven.
Huawei's spokesman told Reuters:
"Baseless suggestions otherwise or purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges."
In response China's Foreign Ministry urged politicians to "set aside prejudice" and said their "investment in the United States embodies the mutually beneficial nature of Sino-American economic and trade relations".
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