Beijing and Washington have been locked in a tit-for-tat tech battle, vying for supremacy in fields including advanced semiconductors and artificial intelligence.
For decades, California-based Intel has dominated the market for the chips that run everything from laptops to data centres, with China among the company's biggest markets.
The statement by the Cybersecurity Association of China (CSAC) -- an industry group with close links to the Chinese government -- said some processing units made by Intel were deemed to have "frequent" security flaws.
This, the statement claimed, has exposed users to potential attacks that could see sensitive personal data, including passwords and bank card numbers, stolen.
"Intel has made a lot of money in China, but the company has continuously done things that harm China's interests and threaten China's national security," CSAC said in a statement.
"It is recommended to initiate a cybersecurity review of Intel's products sold in China to effectively safeguard China's national security and the lawful rights and interests of Chinese consumers," it added.
The statement also said Intel was working to "suppress China" by requiring its suppliers to avoid using labour or products from the Xinjiang region, where Beijing is accused of widespread rights violations.
The US Uyghur Forced Labor Prevention Act bans the import of all goods from the Xinjiang region unless companies offer verifiable proof that production did not involve such a violation.
A spokespoerson at Intel said "security has long been a top priority for Intel, and we go to great lengths to protect our customers."
"We look forward to working with the relevant officials on this matter to clarify any questions that may exist and demonstrate Intel's deep commitment to the safety and security of our products."
The United States and its allies have in recent years restricted technology exports to China, including semiconductors and the machinery used to manufacture them. Beijing has denounced the moves as "bullying tactics".
Last year, Beijing launched an investigation into US memory chipmaker Micron Technology, citing the need to "safeguard national security".
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