New York's Waldorf Astoria
The Waldorf Astoria in New York is part of the Hilton family portfolio Reuters

New York's Waldorf Astoria Hotel is set to lose a key customer – the US State Department – as the hotel is now under the ownership of Beijing-based Anbang Insurance Group, according to media reports.

The department, which has used the luxury hotel for decades as home base for US diplomats during the UN General Assembly, will shift to the nearby New York Palace Hotel allegedly due to concerns arising from the Chinese ownership. The next General Assembly meeting is scheduled to be held in September.

The government's decision, which is yet to be announced formally, was first reported by the Associated Press. State Department officials have not given a reason for their move.

There is a possibility that China might install eavesdropping equipment during the planned renovation of the Art Deco New York hotel, according to US intelligence officials.

Hilton Worldwide Holdings sold the hotel, which is one of the world's most prestigious and best known, to Anbang Insurance for $1.95bn (£1.23bn, €1.71bn) in 2014, and the department has been considering a shift since then, according to the reports.

"It is always a privilege to host representatives of the US Department of State and we hope to have to occasion to welcome them back to the Waldorf Astoria New York when the opportunity presents itself," Waldorf Astoria said in a statement.

Bilateral relations between China and the US have worsened after the latter criticised the former for a number of hacking attacks on government systems.

The US Office of Personnel Management (OPM), which runs background checks of employees, said it had detected the malicious activities suspected to be sourced from Chinese systems, in April 2015. Records of millions of current and former federal employees are suspected to have been stolen due to the attack.

China earlier denied any hand in the massive data breach, accusing the US of "jumping to conclusions and making hypothetical accusation."