The move comes at a time of growing trade tensions and strategic competition between the world's two biggest economies.

It is aimed at promoting foreign investment, while protecting US national security interests "particularly from threats posed by foreign adversaries" like China, the White House said.

In particular, the memo took aim at China for "increasingly exploiting United States capital to develop and modernize its military, intelligence, and other security apparatuses."

It called for the Committee on Foreign Investment in the United States (CFIUS) to be used to restrict Chinese investments in key US sectors such as technology, critical infrastructure, health care and energy.

CFIUS is a panel that weighs the national security implications of foreign investments in the United States.

"President Trump is keeping his promise to prevent foreign adversaries from taking advantage of the United States," the White House said.

Friday's memo came after Trump imposed additional customs duties of 10 percent on all products imported from China at the start of this month, over the country's alleged role in the deadly fentanyl trade.

Beijing has pushed back against the accusation.

But on Wednesday, the US president suggested that a trade deal with China was "possible."