China is investigating a Canadian couple for the suspected theft of military and intelligence information and for threatening national security, China's Foreign Ministry said.
The suspects have been named by Xinhua news agency as Kevin and Julia Garratt.
The couple run a coffee shop in Dandong just across the border from North Korea and have reportedly been living in China since 1984.
Xinhua said the case is being investigated by Dandong's State Security Bureau.
"Kevin Garratt and his wife ... are suspected of collecting and stealing intelligence materials related to Chinese military targets and important Chinese national defence scientific research programmes, and engaging in activities that endanger China's national security," the Chinese Foreign Ministry said in a statement.
The Canadian embassy said it was aware of reports that two Canadians had been "detained" in China and was gathering information on the matter.
Speaking to a Hong Kong based newspaper one of the couple's three children, Simeon, denied the allegations describing them as "wildly absurd".
Besides running the cafe, the Garratts regularly held community events for people to practice their English and helped people plan tours to North Korea.
China's state secrets law is notoriously broad, covering everything from industry data to the exact birth dates of state leaders.
In severe cases, the theft of state secrets is punishable with life in prison or the death penalty.