The New York-based Mintz Group is "suspected of illegal operations", Chinese foreign ministry spokesperson Mao Ning said, adding that "the relevant case is now under investigation".
Mao did not share further details about the investigation into Mintz Group, which specialises in investigations into fraud, corruption and workplace misconduct allegations, as well as background checks.
The firm said on Friday that authorities had "detained the five staff in Mintz Group's Beijing office, all of them Chinese nationals, and have closed our operations there".
The company has "retained legal counsel to engage with the authorities and support our people and their families", it added.
Mintz did not respond to an AFP request for comment on Beijing's announcement Monday.
Mintz Group has offices in 18 locations, including Washington.
Its Asia head, Randal Phillips, had said in 2017 that the United States should address structural imbalances in trade stemming from Chinese policies.
Phillips -- formerly a chief representative for the US's Central Intelligence Agency (CIA) in China -- also testified before the congressional US-China Economic and Security Review Commission in 2018 on Beijing's efforts to exert international influence.
He is now based in Singapore, according to the group's website.
The detentions come in the face of some of the worst US-China relations in decades, as the two powers clash over everything from trade to human rights.
Tensions flared in February after the United States shot down an alleged Chinese spy balloon, which Beijing insisted was a weather monitoring device.
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