The US says it has revoked the visas of more than 1,000 Chinese students and researchers who are deemed to be a security risk.
The move follows a proclamation by President Donald Trump in May aimed at Chinese nationals suspected of having ties to the military. He said some had stolen data and intellectual property.
China has accused the US of racial discrimination.
Nearly 370,000 students from China enrolled at US universities in 2018-19.
A state department spokeswoman described those whose visas were revoked as "high-risk graduate students and research scholars".
She said they were a "small subset" of the total number of Chinese students.
"We continue to welcome legitimate students and scholars from China who do not further the Chinese Communist Party's goals of military dominance," the spokeswoman said.
The Chinese foreign ministry denounced the move at a daily media briefing in Beijing.
"This is outright political persecution and racial discrimination. It seriously violates the human rights of these Chinese students," spokesman Zhao Lijian said, adding that China reserved the right to "further respond".
The proclamation of 29 May accused China of engaging in a "wide-ranging and heavily resourced campaign to acquire sensitive United States technologies and intellectual property" and said it was using some students "to operate as non-traditional collectors of intellectual property".
Some Chinese students in the US say they are facing increased hostility and suspicion on university campuses, and their reasons for studying being questioned.
New front in US-China conflict
Zhaoyin Feng, BBC Chinese, Washington
Though hardly unexpected, this move still comes as a bombshell for nearly 370,000 Chinese nationals studying in the US.
Many of them have been anxious about US-China tensions, especially Washington's increased scrutiny of Chinese students in America over technology theft and economic espionage.
US Assistant Secretary of State David Stilwell told me last month that, against Chinese nationals who concealed military ties and came to the US "masquerading" as students, "we have to defend ourselves". The US authorities have indicted several Chinese nationals for visa fraud and theft of trade secrets.
But many Chinese students see Washington's move as unreasonable, fearing that they are being used as a pawn in the escalating US-China competition.
According to an online spreadsheet collecting self-reporting information from affected students, Washington's scope of visa revocation appears to go beyond Chinese graduate students in advanced scientific fields, also targeting undergraduate students and those studying economics and finance.
Education used to be low-hanging fruit for US-China co-operation but now it has turned into a new front in the bilateral conflict.