An American report accuses China of "digital authoritarianism", using technology not only to track down its citizens but also to exercise power beyond its borders.
He warns that China's growing influence on the digital sphere may soon overshadow that of the United States and other democracies.
And expresses concern about the export of surveillance technology.
The U.S. has put pressure on other countries to ban Huawei from their mobile networks.
It is also considering a broader ban than other Chinese tech companies like TikTok.
Relations between the United States and China are strained, not only for the role of Chinese technology companies, but for the coronavirus pandemic and more general trade between the two nations.
Extensive new security rules in Hong Kong and evidence suggesting mistreatment of the Uyghur population have increased general concerns about China's role in global politics.
The report, commissioned by Democratic Senator Bob Menendez, warns that China could rewrite Internet rules unless the United States and its allies respond.
"The United States is now in the process of losing the future of cybernetic dominance in China," the report said.
"If China continues to refine the tools of digital authoritarianism and is able to implement them effectively both nationally and overseas, then China, not the United States and its allies, will shape the digital environment."
He warns that Beijing has already invested heavily in digital surveillance technology which it has exported to countries like Venezuela, Zimbabwe and Uzbekistan.
In the meantime, many of the world's largest technology platforms - Google, Twitter and Facebook - are banned in China.
The report recommends to the United States government:
- establishes a cybernetic military service academy
- form a coalition of countries to fight China
- creates a digital rights promotion fund to reject China's use of mass surveillance
Leslie Vinjamuri, an expert from the Chatham House think tank, said it was a "significant" relationship that suggested that Democrats would be tough on China if the party took power after the 2020 elections.
"This is a sign of where the Democrats are going and suggests a series of strong policies that will put more pressure on Europe to follow the United States on this," he said.
"It's been a long time and it's basically an invitation to arms for the United States to protect not only itself and its tech companies, but to campaign for all democracies. If they manage to get a coordinated strategy, it's a serious threat for China. "
Offering alternatives to companies like Huawei has been a "smart game if you want to keep China out," he added.
