China's People's Liberation Army has begun biggest-ever military exercises including live firing on the waters and in the airspace surrounding the island of Taiwan following US politician Nancy Pelosi's visit.
The live fire drills began at 12:00 local time (04:00 GMT) on July 4 and in several areas were due to take place within 12 miles of the island.
Taiwan said China was trying to change the status quo in the region.
Ms Pelosi made a brief but controversial visit to Taiwan, which China regards as a breakaway province.
The drills are Beijing's main response, although it has also blocked some trade with the island.
The exercises are due to take place in busy waterways and will include long-range live ammunition shooting, Beijing says.
Taiwan says it amounts to a sea and air blockade while the US said the drills were irresponsible and could spiral out of control.
Analyst Bonnie Lin told the BBC that the Taiwanese military would react cautiously but there was still a risk of confrontation.
"For example, if China decides to fly planes over Taiwan's airspace, there is a chance that Taiwan might try to intercept them. And we could see a mid air collision, we could see a lot of different scenarios playing out," she said.
Taiwan said it scrambled jets to warn off Chinese warplanes on Wednesday and its military fired flares to drive away unidentified aircraft over the Kinmen islands, located close to the mainland.
Several ministries have suffered cyber-attacks in recent days, the Taiwanese government said.
Taiwan has also asked ships to take different routes and is negotiating with Japan and the Philippines to find alternative aviation routes.
Japan has also expressed concern to China over the areas covered by the military drills, which it says overlaps with its exclusive economic zone (EEZ).
In response, Chinese government spokeswoman Hua Chunying said Beijing did not accept the "so-called" Japan EEZ.
On Wednesday, China detained a suspected Taiwanese separatist in the coastal Zhejiang province on suspicion of endangering national security, according to local media reports.
Meanwhile China's Ambassador to France Lu Shaye told French TV that after "reunification" with Taiwan, Beijing would focus on "re-education".
China has previously used the term "re-education" to refer to its detention of mostly-Muslim minorities in its north-western Xinjiang region, where human rights groups say more than a million people have been incarcerated.
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