Police said that the 74 men and 26 women were arrested on Friday night at their residences in and around the capital following a court order. Those arrested were to appear in court later Saturday.
Thousands of Chinese work in Chinese-funded development projects across the island. Many more arrive on tourist visas and work in the hospitality industry.
China has been investing heavily in Sri Lanka as it enlarges its presence in South Asia.
In June, the tropical island nation opened Sri Lanka's first Chinese-built port, for which China loaned money. The port was seen as a strong symbol of Beijing's investment and interest in the region.
China is also building a second port in Colombo and Chinese firms have pledged investments totalling $50 billion spread over the next 10 to 15 years, according to Sri Lanka's trade ministry.
Regional power India views Sri Lanka as firmly within its sphere of influence and has been concerned about China getting a foothold there and in other surrounding countries.