BEIJING: China on Thursday denounced rules unveiled by the US that ban technology giant Huawei and other Chinese firms from government contracts as "abuse of state power" in the latest move in the escalating China-US trade war.

The interim rule, which will preclude any US federal agency from purchasing telecom or technology equipment from the firms, is part of a sweeping effort by Washington to restrict Huawei, which officials claim is linked to Chinese intelligence.

"The abuse of state power by the United States to unscrupulously and deliberately throw mud at and suppress specific Chinese enterprises seriously undermines the image of the United States and its own interests," said Chinese foreign ministry spokeswoman Hua Chunying.

"We firmly support the relevant Chinese companies in taking up legal weapons to safeguard their legitimate rights and interests," she said in an online statement.

The ban on Chinese tech firms comes amid a heated dispute between the two economic powers over international trade rules.

Last week, US President Donald Trump announced new tariffs on another $300 billion in Chinese imports and formally branded Beijing as a currency manipulator on Monday, in response to a drop in value of the yuan.

Huawei also faces moves from Washington to blacklist the Chinese tech firm citing national security concerns, cutting it off from American-made components it needs for products -- though it was issued a 90-day reprieve in May.

That ban could prevent Huawei from getting key hardware and software including smartphone chips and elements of the Google Android operating system.

The latest restrictions unveiled on Wednesday also bar contracts to Chinese firms ZTE, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company and Dahua Technology Company.

The rules, which require a 60-day comment period, implement a ban included in the defence authorisation act Congress approved earlier this year.

Huawei said it would challenge the move in federal court.—AFP