Shares in Chinese hardware companies plunged on Friday led by computer maker Lenovo, after a report on Thursday evening claimed that spies had used thousands of microchips to infiltrate the IT systems of US companies.
Bloomberg claimed there had been a major "supply chain hack" of around 30 companies as well as US government agencies by the Chinese People's Liberation Army.
The news agency said Chinese spies had placed the malicious computer chips in the hardware used to make servers in the US.
It claimed that Amazon and Apple were among the companies affected, and were cooperating with a wider US government investigation into the chips, led by the FBI.Both Apple and Amazon denied the report.
However, the report caused ripples across Asia, with shares in a number of Chinese hardware companies slipping over the course of Friday.
Hong Kong-listed telecommunications company ZTE closed down 11 per cent yesterday and computer maker Lenovo ended 15 per cent lower, as analysts warned the allegations may dampen demand for Chinese-manufactured goods.
Neither ZTE nor Lenovo were named by Bloomberg.
ZTE had already become embroiled this year, after it was banned from doing business with US suppliers, having pleaded guilty to bypassing US sanctions against Iran and North Korea.
ZTE finally settled, having sacked its entire board and paid a $1b ($1.55b) fine.
The measures were seen as a reflection of Donald Trump's tougher stance on China.
This week, Mike Pence, US vice president, accused Beijing of employing a "whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests".
China's foreign ministry said the claims were "malicious slander".