Beijing imposed the security law on Hong Kong targeting acts of subversion, secession, terrorism and foreign collusion with a maximum penalty of life imprisonment.
Major US internet companies including Facebook, Microsoft, Google, Twitter and Zoom have all announced they have suspended the processing of requests for user data.
The US companies' social media platforms are generally banned in China, where access is blocked by Beijing's "great firewall".
Beijing maintains that "One Country, Two Systems" deal is still being respected but critics believe the new law threatens civil liberties in the financial hub.
Xinhua said the eventual law would criminalise "secession, subversion of state power, terrorism, and collusion with foreign forces" that endanger security.