China accused the UK of "trampling" on the basic rules of international relations - and said giving Britain citizenship to Hong Kong was "gross interference in China's internal affairs."
China's ambassador to the UK Liu Xiaoming said the Boris Johnson government was making "irresponsible comments" about Hong Kong.
The new national security law outlaws separatist, destructive or terrorist activities, as well as foreign interference in the internal affairs of the city.
Liu denies that China failed to meet its international obligations after the British government accused it of canceling the Sino-British joint declaration, which would give Hong Kong full autonomy by 2047.
At a news conference - five days after being called to the Foreign Office in London - Mr. Liu said: "China rules Hong Kong by basic law, not a joint statement."
He said he was holding a news conference to ensure that the British people understood the national security law imposed in Hong Kong last week and that the media coverage was "misrepresented."
The ambassador said the new law would not change Hong Kong's "capitalism", its high level of autonomy, or its legal system - a controversy some critics and protesters contend.
Liu said the security law protects Hong Kong and will "end the chaos and restore order" in the city after months of protests over what the protesters see as China's growing aggression.
He accused Britain of failing to meet international obligations of sovereign equality and not interfering with relations with other countries.
"Britain is well aware that Hong Kong is no longer under its colonial rule. Hong Kong has returned to China and is now part of China," he said.
“Britain has no sovereignty, jurisdiction, or oversight over Hong Kong after its extradition.
"However, the UK government continues to make irresponsible comments on Hong Kong cases, leading to unfair accusations against China."
Before being returned to China in 1997, the British government provided a path for citizenship in Hong Kong for nearly three million people who qualified for British national immigration status.
Responding to the proposal, Liu said: "This move is a comprehensive intervention in China's internal affairs and publicly tramples on the basic rules of international relations."
“Hong Kong is a part of China, Hong Kong cases should not involve Chinese internal affairs and external interference.
"Preventing, suppressing and punishing conspiracies with a foreign country that endangers national security is an important task. No one should underestimate China's determination to protect its security."
Mr Liu said that China would decide on the full response of the UK to the Hong Kong people as they saw the details of the plan - and said he hoped the UK would "re-examine its position".
Sky News foreign affairs editor Deborah Haynes has expressed concern over the use of the controversial Chinese telecommunication company Huawei and the British government to run the 5G network.
Mr. Liu said: "You don't want Huawei. It's up to you."
He warned that if Britain decides to reject Huawei, the move, which would hamper Britain's image as a business-friendly environment and suggest that there is no independent foreign policy, would be "very likely."
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