A government spokesman insisted that China protects religious freedom and accused Washington of ``grossly interfering'' in Chinese affairs.
The Sept. 5 report, part of an annual survey of religious freedoms worldwide, came at a sensitive time as Congress considers granting permanent normal trade status (PNTS), and the low tariffs that go with it, for Chinese imports.
In Washington, Wednesday the Senate defeated a proposal to attach anti-weapons-sales sanctions to the PNTS bill it is considering, opening the path for passage of the most important trade bill of this Congress.
The vote was 65-32 against the weapons proliferation amendment, with numerous senators saying they support the goals of tougher monitoring of Chinese weapons sales but are concerned that linking trade and weapons could doom passage of the trade bill this year.
``All senators agree that we must address China's record on proliferation, but it is equally clear that this permanent trade bill was never the right vehicle for that debate,'' said Sen. Max Baucus, D-Mont.
At least a dozen other amendments remained before the Senate could finish work on the bill by next week, but none is likely to pose a serious threat to the goal of an amendment-free bill.
Earlier efforts to tie PNTS to Beijing's policies on religious freedom also were defeated.
The House in May passed the bill that ends the annual review of U.S.-China trade relations and grants China PNTS in conjunction with that country's impending entry into the World Trade Organization.
To join the WTO, China has agreed to significantly lower its tariffs and remove trade barriers, actions that could mean billions of dollars in increased business for American companies.
The State Department report said conditions for Falun Gong and Tibetan Buddhists had ``deteriorated markedly,'' while Roman Catholics and other religious groups also were harassed.
``Relying solely on rumors and lies to accuse other governments and interfere in internal affairs of other countries is a mistake repeatedly made by the U.S. State Department report. This bad habit should be addressed,'' an unidentified spokesman for the State Administration of Religious Affairs said in remarks carried by the official Xinhua News Agency.
China's 14-month-old Falun Gong crackdown appears to be part of a broader campaign meant to tighten government ideological control. Religious and human rights groups say Catholic clergy have been arrested, Tibetan monks and nuns required to attend political classes and independent-minded scholars dismissed from government posts.
The government spokesman said the Falun Gong crackdown was necessary to stop an ``evil cult.''
Thousands of Falun Gong followers have been detained since the multimillion-member group was banned as a threat to communist rule. The government has released many of them, saying low-level followers were misled by Falun Gong leaders.
Human rights groups and Falun Gong activists abroad have reported a handful of deaths among followers detained by police.
The Xinhua report did not respond to the State Department's account of numerous arrests of Tibetan monks and nuns, beatings of several monks and an ongoing campaign of indoctrination meant to increase Beijing's influence in monasteries.
The spokesman acknowledged that the Tsurphu Monastery--home of the Karmapa Lama--one of Tibetan Buddhism's highest leaders, had been closed temporarily. But he denied that it was linked to the departure of the Karmapa, who fled to India earlier this year. The spokesman said the monastery has reopened after repairing a dilapidated fresco.
The spokesman also denied accusations in the U.S. report of stepped-up persecution of the underground Roman Catholic church.
Communist leaders ordered Catholics to renounce loyalty to the pope in the 1950s. Religious and human rights groups have reported arrests of clergy who continue to worship outside the state-monitored official Catholic church.