The US is expected to soon file a formal request for the extradition of Huawei executive Meng Wanzhou, Canadian media report.
The Chinese telecoms executive was arrested on 1 December in Canada at the request of American officials.
She is accused by the US of breaking American sanctions on Iran.
China has demanded Ms Meng’s release and has accused both the US and Canada of “arbitrarily abusing” their extradition treaty.
Chinese foreign ministry spokeswoman Hua Chunying on Tuesday said both countries had made a “serious mistake” and urged the US to “withdraw its arrest order for Ms. Meng Wanzhou and refrain from making formal extradition request to the Canadian side”.
The Globe and Mail newspaper reported late on Monday that US officials have indicated to David MacNaughton, Canada’s ambassador in Washington, that they plan to proceed with the extradition request of the Huawei executive.
Under Canadian law, the US has 60 days to file its formal request, a deadline that will be reached 30 January.
Canada’s Foreign Minister Chrystia Freeland said in an interview on Tuesday with Bloomberg TV that Canada has not asked the US to abandon its bid to have Ms Meng extradited.
The US accuses Ms Meng of using a Huawei subsidiary called Skycom to evade sanctions on Iran between 2009 and 2014. Both she and Huawei deny those allegations.
Ms Meng’s arrest has led to rising tensions between Canada and China, and Ottawa has been rallying allies in recent weeks seeking international support in its spat the Asian superpower.
On Monday, 140 western academics and diplomats sent an open letter to Chinese President Xi Jinping pleading the case of two Canadians, Michael Kovrig and Michael Spavor, suspected of spying and calling for their release.
Mr Kovrig, a former Canadian diplomat, and Mr Spavor, a businessman, were both detained in China shortly after Ms Meng’s arrest in Canada.
A number of China analysts believe that the two men’s arrests were a tit-for-tat response to the detention of Huawei’s chief financial officer, something Chinese officials have denied.
Ms Hua had a strong response to that letter on Tuesday, calling it “disrespect for China’s judicial sovereignty and the spirit of the rule of law”.
The tech executive was released on bail by a Canadian court in December.
The dispute over between the two countries comes amid growing scrutiny in Western countries over Huawei.
Concern about the security of the company’s technology has been growing, particularly in the US, UK, Canada, Australia and Germany, which fear its products could be used for spying.
Speaking at the World Economic Forum in Davos, Huawei chairman Liang Hua warned his company could shift away from the US and the UK if it continues to face restrictions.
The US has banned the company from bidding for government contracts, and British firm BT recently confirmed that Huawei equipment was being removed from a communication system being developed for the UK’s emergency services.
Huawei has always maintained that it is a private company, owned by its employees, with no ties to the Chinese government.