The US has imposed sanctions on seven Chinese firms suspected of selling nuclear weapons technology to Iran.
The penalties, which will remain in place for two years, include a ban on trading with, and receiving assistance from, the US government.
A Chinese foreign ministry spokesman dismissed the move, saying the "wanton launch of sanctions...without real evidence is not a wise choice".
A company from Taiwan and one from North Korea are also affected.
Iran has denied US accusations that it is seeking to develop nuclear weapons, insisting that its nuclear plans are for peaceful energy purposes.
SANCTIONED COMPANIES
The firms are being punished under the 2000 Iran Non-Proliferation Act, signed into law by then President Bill Clinton.
China's oil needs
Last June, a US congressional report said China was failing to curb the proliferation of missile technology, despite promises from the Chinese government. It suggested China's growing dependence on Middle East oil was the reason for this.
The US has been putting increasing pressure on Iran over its nuclear programme and wants the United Nations Security Council to consider imposing sanctions.
Last week, inspectors from the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), visited Parchin military base near Tehran, to see whether nuclear material had been tested there.
In a television interview on Monday, US President George W Bush said he would not rule out military action.
"I hope we can solve it diplomatically, but I won't ever take any option off the table," Mr Bush told NBC News.
However, the US has dismissed claims by investigative reporter Seymour Hersh that US commandos have been carrying out covert operations inside Iran ahead of possible future military strikes.
Iran avoided UN sanctions in November when it agreed to suspend uranium enrichment and all related activities.
The European Union last week resumed trade talks with Iran, suspended for about 18 months.
The other Chinese firms sanctioned by the US are: Beijing Alite Technologies, China Aero-Technology Import Export Corporation (CATIC), QC Chen, Wha Cheong Tai Company and Zibo Chemet Equipment Corporation.
The Taiwanese firm is Ecoma Enterprise Company, and the North Korean firm is Paeksan Associated Corporation.
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