It can target coastal defence sites, surface-to-air missile sites, exposed aircraft, ships in port, and port and industrial facilities.
Earlier, China said it was imposing sanctions on Boeing, Lockheed Martin and other US defence firms for providing weapons to Taiwan.
The ruling Communist Party claims Taiwan, which split with the mainland in 1949 during a civil war, as part of its territory and has threatened to invade. Washington promised in the 1980s to reduce and eventually end weapons sales to Taiwan but insists its dispute with Beijing must be settled peacefully.
A Foreign Ministry spokesman, Zhao Lijian, gave no details on what penalties might be imposed or when.
"In order to safeguard national interests, China decided to impose sanctions on the American companies that were involved in arms sales to Taiwan," Zhao said.
Chinese-US relations have plunged to their lowest level in decades amid disputes about security, technology, the coronavirus pandemic and human rights.
Taiwan has long been an irritant in relations. Washington has no formal relations with the island's democratically elected government but is its main ally. US law requires the government to ensure Taiwan can defend itself. Weapons sales to the island have increased in quantity and quality.
Beijing regularly pressures American companies including Boeing in an effort to influence US policy. China is one of Boeing's biggest markets for commercial aircraft, which might make it vulnerable to a boycott, but Zhao mentioned only Boeing's military arm, Boeing Defence, not its civilian jetliner business.
- AP