China's online censorship system protects national security and does not discriminate against foreign companies, the country's Internet regulator said, after the United States labeled the blocking of websites by Beijing a trade barrier.

The U.S. Trade Representative (USTR) wrote in an annual report that over the past year China's Web censorship has worsened, presenting a significant burden to foreign firms and Internet users.

China has long operated the world's most sophisticated online censorship mechanism, widely known outside the country as the Great Firewall, though USTR had not listed it as a trade impediment since 2013, when Xi Jinping became China's president.