China's legislature has passed a law giving it the legal right to use force against Taiwan if the island moves towards declaring formal independence.
China's leaders fear Taiwan could formally declare independence
The National People's Congress passed the law as Premier Wen Jiabao warned "outsiders" not to get involved.
China sees Taiwan as its territory, and says it reserves the right to use force if "peaceful re-unification" fails.
The Congress also backed an increase in China's official military spending of almost 13% to $29.5bn (£15bn).
China's announcement last week of the anti-secession law drew criticism in Taiwan and from US Secretary of State Condoleezza Rice.
But in Monday's final session of the 11-day annual Congress, the anti-secession law was passed almost unanimously by a margin of 2,896 to zero, with two abstentions.
Delegates broke into applause when the law was passed.
Wen Jiabao said the law was aimed at strengthening relations with Taiwan.
"This is a law to strengthen and promote cross-Strait relations, for peaceful reunification, not targeted at the people of Taiwan, nor is it a law of war," he said.
Ruled by separate governments since end of Chinese civil war in 1949
China considers the island part of its territory
China has offered a "one country, two systems" solution, like Hong Kong
Most people in Taiwan support status quo
China's senior legislator, Wu Bangguo, said the law "represents the people's determination not to allow Taiwan to be separated from China by any means or any excuses".
As passed, the law calls for the use of "non-peaceful and other necessary measures" if hopes for peaceful unification are exhausted.
Some analysts have said China's emphasis on "non-peaceful" means appears designed to include alternatives to military force, such as blockades or sanctions.
On Sunday, China's President Hu Jintao told China's 2.5 million-strong People's Liberation Army, whose budget has risen rapidly in recent years amid growing concern in the US, to put national defence "above all else".
"We shall step up preparations for possible military struggle and enhance our capabilities to cope with crises, safeguard peace, prevent wars and win the wars if any," the president said.