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The warning came after US President Donald Trump signed the law on human rights and democracy.
The law requires an annual review to see if Hong Kong has sufficient autonomy to justify a special status with the United States.
Trump is currently seeking an agreement with China in order to end a trade war between the two countries.
"The United States ignored the facts and distorted the truth," said a statement from the Chinese Foreign Ministry.
"He has openly supported violent criminals who have unrestrainedly smashed structures, set fire, attacked innocent civilians, trampled on the rule of law and endangered the social order."
The ministry threatened "countermeasures" if the United States continued "following the wrong path".
What are the implications of the account?
The new law requires Washington to monitor Beijing's actions in Hong Kong. The United States could revoke the special commercial status it granted to the territory if China undermined the rights and freedoms of the city.
Among other things, the special status of Hong Kong means that it is not affected by US sanctions or tariffs applied to the mainland.
The bill also states that the United States should allow Hong Kong residents to obtain US visas if they have been arrested for participating in non-violent protests.
Analysts say the move could complicate negotiations between China and America to end their trade war.
What was the reaction?
The Chinese foreign ministry has summoned the American ambassador to demand that Washington stop interfering in Chinese internal affairs.
The Hong Kong government also reacted, saying that the American bill would send the wrong signal and would not help alleviate the situation.
But a key activist in the Hong Kong protest movement, Joshua Wong, said US law was an "extraordinary achievement" for "all Hongkongers".
How was the account born?
The bill was presented in early June in Hong Kong protests and was overwhelmingly approved by the House of Representatives last month.
Trump said he signed it "out of respect for President Xi [Jinping], China and the people of Hong Kong".
It had previously been non-binding, saying it was "with" Hong Kong but also that Mr. Xi was "an incredible boy".
However, the bill had broad congressional support, which meant that even if he vetoed the legislators, they could potentially vote to overturn his decision.
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"[The bills] are being enacted in the hopeful leaders of China and Hong Kong will be able to amicably settle their differences, leading to long-term peace and prosperity for all," Mr. Trump said.
What is the situation in Hong Kong?
The US move comes in a pause of protests following a landslide in favor of democracy in local elections.
The Hong Kong protests began in June against a bill to allow extradition to mainland China, but since then it has turned into a broader pro-democracy movement.
The protests also saw increasingly violent clashes, with police attacked and agents firing live bullets.
Protesters threw gasoline bombs and attacked companies considered pro-Beijing.
The protesters, meanwhile, have accused the police of brutality.
On Sunday, Hong Kong held local council elections that were seen as a barometer of public opinion against the government and protesters.
The elections saw a landslide victory for the democratic movement, with 17 of the 18 councils now controlled by democratic advisers.
On Thursday, the authorities moved to the Polytechnic University a few days after it was the site of a strong clash between student activists and riot police.
Police said they had found hundreds of petrol bombs and other homemade devices that were dusting them for fingerprints.
A search found no remaining activists on the site, but it is thought that there may still be about a dozen people still hidden inside.
Collect From - BBC News
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