The US would cancel visas of Chinese students and researchers with links to the People's Liberation Army as the Trump administration escalates retaliation against China over the coronavirus pandemic.
Quoting US officials with knowledge of the discussions, The New York Times on Thursday reported that while the plan had been discussed for three years, it was being accelerated as punishment for China recently passing a new national security law to repress Hong Kong.
Plans for the visa restrictions come a day after Secretary of State Mike Pompeo announced that Hong Kong was no longer viewed as independent from China, a move that could cause it to lose special trading status with the US.
It is the latest escalation of policy retribution announcements between the two countries that have included trade, technology and media, as Donald Trump looks for ways to retaliate against China's cover-up of the Wuhan coronavirus outbreak.
The first phase of the plan could affect at least 3,000 students, a small percentage of the 360,000 Chinese students in the US, according to the Times.
While the State Department and National Security Council declined to comment officially, US officials defended the plan anonymously.
According to the reporting, the Chinese government plays an active role in selecting which students from which communist military schools can study in which of the Five Eyes countries of the US, the UK, Australia, Canada and New Zealand.
In exchange for being given a western education, the Chinese military students are expected to collect information as a condition of tuition payment in what the FBI and Justice Department consider basic espionage.
As Chinese graduates from prestigious western universities go on to work at major technology companies, the US sees an increased risk for industrial espionage.
In one example illustrated in the report as an example of the visa cancellation plan, Boston University student Yanqing Ye concealed her affiliation with the People's Liberation Army when she applied to study in the school's department of physics, chemistry and biomedical engineering from October 2017 to April 2019.
Ms Ye studied at the National Defence Technology University in China and was commissioned as a lieutenant before studying in the US, where she was given orders that included "conducting investigations, evaluating United States military websites, and sending United States documents and information to China.
She is currently wanted by the FBI for acting as a foreign agent, visa fraud and making false statements.
While there has been "vigorous" inter-agency debate on the visa cancellation plan for the past six months, it has reportedly been accelerated amid tensions between the two countries over coronavirus and Draconian security laws that give Beijing's security agencies power to operate in Hong Kong and punish "secession, subversion, terrorism and foreign interference".
On Wednesday, the State Department issued a statement saying that Hong Kong no longer maintains a "high degree" of autonomy from China and therefore no longer deserves special treatment under trade law.
The president has said he will talk more about how Washington might retaliate against China, which he believes allowed coronavirus to spread from Wuhan to the rest of the world.
"We're doing something now. I think you'll find it very interesting, but I won't be talking about it today," Mr Trump said on Tuesday. "I'll be talking about it over the next couple of days."