The U.S. decision to investigate China's trade policies in the clean energy market is "groundless and irresponsible," China said Saturday.
President Barack Obama's administration said Friday the issue would be looked into after a union complaint.
"The signal it sends is that the U.S. does not support China's efforts at improving the environment," said a statement posted in response on China's commerce ministry website.
The United Steelworkers say Chinese businesses are able to sell wind and solar equipment on the international market at a cheaper price because they get subsidies from the Chinese government that are prohibited by global trade rules.
If the U.S. investigation found the complaint true, the Obama administration could bring China before the World Trade Organization. If the WTO ruled in its favor, the United States could impose penalty sanctions on Chinese imports unless China halted the alleged subsidies.
The Chinese commerce ministry statement accused the U.S. of sending the "wrong signal of trade protectionism to the outside world."
It also said the U.S. has more than 2,300 energy subsidy-related items of its own, including clean energy. "Therefore, the U.S. has no reason to criticize other countries' efforts to improve the environment."
The Obama administration's announcement came as it said it would also delay a scheduled report on whether China is manipulating its currency to gain trade advantages.
The report is now expected after a G-20 meeting of finance officials next month.
The yuan has been rising by about 1 percent per month since the start of September, a pace that the Treasury statement endorsed.
But U.S. manufacturers say China's currency is undervalued by as much as 40 percent, making U.S. goods more expensive in China and Chinese goods cheaper and thus more competitive in the U.S. market.
China has repeatedly said the yuan is valued appropriately and that the currency issue is not the cause of the large trade gap between the U.S. and China.