Technology giants IBM, Oracle and EMC are to be investigated by China's Ministry of Public Security and a cabinet-level research centre amid security concerns relating to the Prism scandal, according to the official Shanghai Security News.
Former US National Security Agency's (NSA) employee Edward Snowden had exposed the spy agency's Prism surveillance programme with documents suggesting that major tech firms like Facebook, Microsoft and Google had created "back doors" that enabled the government to breach the computer networks of foreign countries like China.
Though IBM, Oracle and EMC have not being named in any of the documents that Snowden has leaked.
"At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems," an anonymous source told Shanghai Securities News, Reuters reported.
The probe would be the latest in a long line of disputes between the US and China on the topic of cyber security.
In March, President Obama signed off a new federal appropriations bill forbidding US government agencies from doing business with any companies "owned, operated, or subsidized" by the People's Republic, which has been interpreted to mean Chinese telecommunication firms Huawei and ZTE.
In May, the Pentagon accused China of hacking US government computer systems, and in June a top Chinese official claimed that China had ‘mountains of data' showing evidence of hacking originating from the US - without directly accusing the US government of computer hacking.
However, last month, the world's two biggest economies had "made progress" after talks on cyber security.