Speaking in a briefing with reporters, Keith Krach, Undersecretary for Economic Growth, Energy and Environment also said Chinese tech giants Alibaba, Tencent and Baidu are "highly strategic" to the Chinese military. On Wednesday, sources said the Trump administration scrapped plans to blacklist Alibaba, Tencent and Baidu.

(Reporting by Humeyra Pamuk and Alex Alper; Editing by Chris Reese)