Editor-in-chief Jeremy Goldkorn in a statement on Tuesday said the organisation's work had put "several targets on our backs" as ties between China and the US continued to deteriorate.
The China Project began as a newsletter in 2016 and was formerly known as SupChina. It expanded to become a "news and business intelligence company" in an effort to help the global audience understand China better.
It launched a China news and society-themed podcast named Sinica, which quickly became popular along with publishing articles on a wide range of China-themed topics on its website. It also launched a business intelligence data product "ChinaEDGE" and organising conferences.
"As the US-China relationship deteriorated ... our work has only become more important," Goldkorn wrote in a statement on the website.
The company sought to produce "balanced" reporting on China and US-China-themed topics, but received criticism as relations between the two giants sank to new depths.
"But sadly, that same work has put several targets on our backs."
He said the organisation has been accused by both the US and China several times of working "for nefarious purposes for the government of the other".
Mr Goldkorn said defending the website had incurred "enormous" legal costs and made it difficult for the organisation to attract investors, advertisers and sponsors.
"The media business is precarious," he said, adding, "We are not prepared to compromise our values for funding".
"This week, we learned that a source of funding that we had been counting on was no longer going to come through, and we have had to make the difficult decision to close down."
The China Project's subscription package offered "the internet's best birds-eye view of China" for $120 a year, which the group said had been growing. However, Goldkorn said the company was not in a position to rely solely on the subscription revenues to sustain the operations.
“We do not have a business model problem,” chief executive Bob Guterma told Reuters.
“We made big plans and pursued them boldly with the full backing of our investors.
“But in the past six months, investor interest has dropped off precipitously due to economic and geopolitical headwinds. We became unable to sustain what we had grown into.”