In the days that followed, the unnamed Chinese-American executive was interrogated about topics including U.S.-China trade tensions, and was not allowed to leave the country until the State Department intervened, the Times report said.
The detention plays into growing fears among American businesspeople about harassment from Chinese authorities. In October, a banker with Switzerland-based UBS was prevented from leaving China in order to meet with Chinese officials.
After Meng Wanzhou, chief financial officer at Chinese tech giant Huawei, was arrested in Canada in December at the request of the U.S. government, China arrested former Canadian diplomat Michael Kovrig and entrepreneur Michael Spavor.
In January, the State Department issued a travel advisory warning Americans to "exercise increased caution" when traveling to China, due to Beijing's occasional attempts to prevent U.S. citizens from leaving the country. China subsequently made a similar announcement to its citizens about travel to the United States.
The Times report said it interviewed several business executives, Washington officials and other frequent visitors to China who said they were increasingly alarmed about authorities' harassment of Americans.
Koch Industries is owned by billionaire brothers David and Charles Koch, known for their support of the Republican party. Two sources told the Times they believe the incident with the executive in June was an attempt to send a message to U.S. President Donald Trump.
Trump and Chinese President Xi Jinping agreed during a meeting late last month to proceed with negotiations regarding a trade dispute that has lasted for more than a year.
Koch Industries did not immediately respond to a CNBC request for comment sent outside of U.S. business hours.
China's Ministry of Commerce spokesperson, Gao Feng, said Thursday during a weekly press conference that the ministry has observed some foreign-invested companies in China are afraid of retaliatory action. He said China will protect the foreign businesses' legitimate rights and interests, without elaborating.
As the world's second-largest economy, China remains a major market for many American companies, and a key manufacturing hub, despite the trade tensions.
"We have not observed any decrease in the number of US executives traveling to China for business. Which leads us to believe the concerns of the type of harassment mentioned in this (NYT) article are low," Jake Parker, vice president of China operations at the U.S.-China Business Council, said in an email to CNBC.
Parker noted the council has heard anecdotes about investigations or frequent regulatory audits for companies, but it was unclear whether those actions were in response to trade tensions or only a result of normal business operations.