• The Human Rights and Democracy Act mandates an annual review, to check if Hong Kong has enough autonomy to justify its special status with the US.
• Hong Kong's government also reacted, saying the American bill would send the wrong signal and would not help to ease the situation.
US President Donald Trump has signed into law a bill that supports pro-democracy protesters in Hong Kong.
The Human Rights and Democracy Act mandates an annual review, to check if Hong Kong has enough autonomy to justify its special status with the US.
Mr Trump said he signed the law "out of respect for President Xi [Jinping], China, and the people of Hong Kong".
China's foreign ministry said it would take "firm counter measures" - accusing the US of "sinister intentions".
Mr Trump is currently seeking a deal with China, in order to end a trade war between the two countries.
Hong Kong's government also reacted, saying the American bill would send the wrong signal and would not help to ease the situation.
But one of the leaders of the Hong Kong protest movement, Joshua Wong, said the US law was a "remarkable achievement" for "all Hongkongers".
Mr Trump had previously been non-committal about whether he would sign the bill, saying he was "with" Hong Kong but also that Mr Xi was "an incredible guy".
However, the bill had widespread congressional support, which meant that even if he vetoed it, lawmakers could potentially have voted to overturn his decision.
The president also signed a second bill, which bans the export of crowd-control munitions to the police in Hong Kong - including tear gas, rubber bullets and stuns guns.
"[The bills] are being enacted in the hope that leaders and representatives of China and Hong Kong will be able to amicably settle their differences, leading to long-term peace and prosperity for all," Mr Trump said.
What does the law say?
The bill was introduced in June in the early stages of the protests in Hong Kong, and was overwhelmingly approved by the House of Representatives last month.
It says: "Hong Kong is part of China but has a largely separate legal and economic system.
"The [annual review] shall assess whether China has eroded Hong Kong's civil liberties and rule of law as protected by Hong Kong's Basic Law."
Among other things, Hong Kong's special trading status means it is not affected by US sanctions or tariffs placed on the mainland.
The bill also says the US should allow Hong Kong residents to obtain US visas, even if they have been arrested for being part of non-violent protests.