China deployed fighter jets and warships to encircle Taiwan on Monday in drills Beijing said were aimed at sending a "stern warning" to "separatist" forces on the self-ruled island.
Beijing has not ruled out using force to bring Taiwan under its control and Monday's drills represent its fourth round of large-scale war games in just over two years.
The United States said China's actions were "unwarranted" and risk "escalation" as it called on Beijing to act with restraint.
President Lai Ching-te, who took office in May, has been more outspoken than his predecessor Tsai Ing-wen in defending Taiwan's sovereignty, angering Beijing, which calls him a "separatist".
Lai vowed on Monday to "protect democratic Taiwan and safeguard national security", while the defence ministry said it dispatched "appropriate forces" in response to the drills.
Chinese foreign ministry spokeswoman Mao Ning hit back, saying "Taiwan independence and peace in the Taiwan Strait are irreconcilable".
AFP journalists near the Hsinchu air force base, in the north of Taiwan, saw 12 fighter jets take off on Monday.
Outlying islands administered by Taipei were on "heightened alert" and "aircraft and ships will respond to enemy situations in accordance with the engagement rules", Taiwan's defence ministry said.
Beijing said its exercises served as a "stern warning to the separatist acts of 'Taiwan Independence' forces".
The drills, dubbed Joint Sword-2024B, are testing troops' "joint operations capabilities", according to Captain Li Xi, spokesman for the Chinese military's Eastern Theater Command.
They are taking place in "areas to the north, south and east of Taiwan Island", he said.
The drills are "focusing on subjects of sea-air combat-readiness patrol, blockade on key ports and areas", Li said.
They also practised an "assault on maritime and ground targets".
The Liaoning aircraft carrier group "with its troops of army, navy, air force and rocket force" was also involved, Li said.
The previous large-scale drills held in May, three days after Lai's inauguration, were called "Joint Sword-2024A" and lasted two days.
China's coast guard was also sent to conduct "inspections" around the island.
A diagram released by the coast guard showed four fleets encircling Taiwan and moving in an anti-clockwise direction around the island.
The coast guard of the eastern province of Fujian -- the closest area on the mainland to Taiwan -- also said it was conducting "comprehensive law enforcement patrols" in waters near the Taipei-controlled Matsu islands.
Taiwan said four "formations" of China coast guard ships were patrolling the island and had briefly entered its restricted waters, but not its prohibited waters.
China has ramped up military activity around Taiwan in recent years, sending warplanes and other military aircraft while its ships maintain a near-constant presence around the island's waters.
"In the face of enemy threats, all officers and soldiers of the country are in full readiness," Taiwan's defence ministry said on Monday.
Lai convened a high-level security meeting over the drills, said Joseph Wu, secretary-general of the National Security Council, who described the exercises as "inconsistent with international law".
In his National Day speech on Thursday, Lai vowed to "resist annexation" and insisted that Beijing and Taipei were "not subordinate to each other".
Lai's Democratic Progressive Party has long defended the sovereignty and democracy of Taiwan, which has its own government, military and currency.
Beijing said on Monday the drills were "a legitimate and necessary operation for safeguarding state sovereignty and national unity".
Lieutenant Colonel Fu Zhengnan, a researcher at the Chinese Academy of Military Sciences, said in a video shared by state media that the drills could "switch from training to combat at any time".
"If Taiwan separatists provoke once, the PLA's operation around the island will make their first move," Fu said, referring to China's People's Liberation Army.
Taiwan's coast guard said on Monday it had detained a Chinese man on one of its outlying islands after a possible "grey zone intrusion", referring to tactics that fall short of a direct act of war.
In Taipei, people appeared to be largely unperturbed.
"I won't panic too much because they quite often have drills," 34-year-old engineer Benjamin Hsiao told AFP.
"It's not the first time in recent years anyway, so I feel a bit numb."
AFP journalists saw about five military jeeps mounted with machine guns on Monday afternoon patrolling around Taipei Songshan Airport, which is also a military air base.
The dispute between China and Taiwan dates back to a civil war in which the nationalist forces of Chiang Kai-shek were defeated by Mao Zedong's communist fighters and fled to the island in 1949.
China and Taiwan have been ruled separately since then.
