The law authorizes China to use force to stop Taiwan from pursuing formal independence, but it doesn't give details of what specific developments might trigger an attack.
China's anti-secessionist law is a serious threat to security in Asia, Taiwan warned in the democratic island's first reaction to China's passage of the measure Monday.
About 30 protesters — mostly pro-independence lawmakers — demonstrated outside the Taiwanese legislature, burning a Chinese flag and chanting anti-China slogans.
Joseph Wu, the island's top policy maker for China relations, said, "It will be difficult to maintain true peace and stability in the Asia-Pacific region" because China refused to renounce the use of force against Taiwan while passing the bill.
Wu added the law "provides a blank check" for China to annex Taiwan.
Taiwan and China split in 1949, but the communist mainland claims the self-ruled island as its territory and has threatened repeatedly to attack if it tries to make its de-facto independence permanent.
The law "inevitably violates the fundamental rights of the Taiwanese" and has caused "utter resentment," said Wu, chairman of the Mainland Affairs Council.
Passing the law helped unite the Taiwanese government and opposition parties, which rarely agree on anything. The biggest opposition party, the Nationalists, accused China of making the public uneasy and urged the two sides to begin peace talks.
"Even if the Chinese communists determine the island's pro-independence forces have stepped over their red line, ... the innocent Taiwanese should not take the consequences of the problem," the party said in a statement.
"If the two sides sharpen their confrontation and berate each other, it will hurt the interests of both people," it said.
China insists that the law is meant to encourage peaceful unification with Taiwan. Chinese Premier Wen Jiabao said the law is not a "war bill" and said it wasn't meant to change the status quo in the Taiwan Strait.
But Taiwanese political scientist Alexander Huang said the law will have a significant effect on relations because it gives unification as the only option for Taiwan.
"Taiwan hopes to keep all options open for the future. Now they foreclose Taiwan's de jure independence with a law," said Huang, professor of China studies at Tamkang University.
"We know there's a red line there that shouldn't be crossed, but now they actually draw the line and that would cast a cloud over Taiwanese," Huang said.
"I want the two sides to work hard toward a peaceful solution, so there will not be any negative impact," said Japanese Prime Minister Junichiro Koizumi, whose government recently declared a diplomatic resolution of the Taiwan dispute as a strategic objective with the United States.
An outbreak of hostilities would be a severe blow to stability in East Asia, possibly prompting a response from the United States — which has some 50,000 troops in Japan and 35,000 in South Korea — to defend Taiwan.
Such a conflict could pin top U.S. allies in the area such as Japan and Australia between treaty obligations to Washington and reluctance to alienate China, which is assuming a growing political and economic role in the region.
Russia on Monday reaffirmed Moscow's opposition to independence for Taiwan and said it considered the question of Taiwan an internal matter for China, a top strategic partner for Russia in Asia.
The Russian foreign ministry said the new law stressed China's commitment to giving priority to peaceful methods to unify the country under the one state, two systems approach.
Earlier Monday, the Chinese premier offered to welcome imported farm produce from southern Tainan — the birthplace of Taiwanese President Chen Shui-bian. But Taiwanese official Wu dismissed the offer as "a shameless unification ploy."
Wu said, "The best product that has ever come out of Tainan is our popularly elected president," Wu said. "The best goods we can export to the mainland will be our democracy and freedoms."