Chinese Vice Foreign Minister Le Yucheng lodged a "strong protest" with Ambassador Terry Branstad after President Donald Trump signed the legislation into law.
The passage of the bill comes as the world's two biggest economies are locked in negotiations to finalise a partial deal to soothe their trade war.
"Le stressed that China strongly urges the US side to correct mistakes and change course," the foreign ministry said in a statement.
Furious China threatens retaliation over US law on Hong Kong
Le also urged the United States to "refrain from putting the bill into practice, and immediately stop interfering in Hong Kong affairs and China's internal affairs, so as to avoid further damage to China-US relations and bilateral cooperation in important areas".
The Hong Kong Human Rights and Democracy Act requires the US president to annually review the city's favourable trade status and threatens to revoke it if the semi-autonomous territory's freedoms are quashed.
Trump also signed legislation banning sales of tear gas, rubber bullets and other equipment used by Hong Kong security forces in putting down the protests.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ