The move could further elevate Hong Kong as a flashpoint between Beijing and Washington.
Foreign ministry spokeswoman Hua Chunying repeated Chinese accusations Monday the Hong Kong Human Rights and Democracy Act "seriously interfered" in Hong Kong's internal affairs, and appeared to back up China's threats the US would bear the costs for backing democracy over one-party Communist rule.
"China has suspended the approval of the request by U.S. aircraft and warships to visit Hong Kong in response to the latest Hong Kong-related bill passed by the USA lawmakers", official media quoted the Chinese foreign ministry as saying.
Protesters in Hong Kong are pushing for greater democratic freedoms and police accountability, but the city's pro-Beijing leadership has refused any major political concessions.
Shops and businesses in the area closed early as police sprayed volleys of tear gas at protesters, including some elderly residents and others with their pets, as they marched past the city's Kowloon waterfront, home to luxury hotels and shopping malls.
Hong Kong has been living with nearly nonstop protests for six months.
They chanted "five demands, not one less" and "disband the police force" as they marched, in reference to the protest movement's five formal demands of the Government. More fundamentally, the protesters and others in Hong Kong fear that China is eroding the rights and freedoms they have under a "one country, two systems" framework.
China said Monday it has imposed sanctions on some USA nongovernmental organizations which are "responsible for the current chaos in Hong Kong" as a countermeasure to the recent US enactment of a Hong Kong human rights law.
Iraq officials: 3 dead in south amid ongoing violence
It comes as protesters shouted "Victory to Iraq! " and " Iran out!", setting fire to the Iranian consulate in the holy Shia city. Protesters kept up their sit-ins in Kut, Amara and Hilla, all south of the capital, despite a notably larger security presence.
China's United Nations mission in Geneva said the article interferes in China's internal affairs and exerts pressure on Hong Kong's government and police, which "will only embolden the rioters to conduct more severe radical violence".
"They shoulder some responsibility for the chaos in Hong Kong and they should be sanctioned and pay the price", said Hua.
China will also take sanctions against some U.S. non-governmental organizations (NGOs) for their role in the disturbances in Hong Kong, Hua said at a press conference.
Among the groups to be subject to the unspecified sanctions, the National Endowment for Democracy receives funding directly from Congress, while others generally draw their running costs from a mixture of private and public grants.
An extradition bill was introduced in Hong Kong in April, triggering the first round of protests.
Visits have at times been refused amid broader tensions and two US ships were denied access in August.
Beijing imposes restrictions on non-governmental organisations, and is particularly concerned about those involved in humanitarian causes, gender equality, the environment or minority rights.
Meanwhile, in Hong Kong on Monday, several hundred people who work in advertising started a five-day strike Monday to show support for anti-government protests in the territory.
Sunday's marches, which were permitted by authorities, came as a top Hong Kong official said the government was looking into setting up an independent committee to review the handling of the crisis, in which demonstrations have become increasingly violent. "China will take further steps if necessary to uphold Hong Kong's stability and prosperity and China's sovereignty", she said.
The protests are blamed for driving the economy into recession.