Chinese state media reported on Saturday that the "law enforcement operation" was in response to talks between Japan and the Philippines to draw a boundary in waters to the east of Taiwan.
China, which asserts Taiwan is part of its territory, called the talks "illegal" and has claimed exclusive control over the waters.
Taiwan's coast guard said its vessels had "expelled" four Chinese ships from the island's "restricted waters", and were now 33 nautical miles (61 kilometres) southeast of the island's southernmost tip.
"Vessels from both sides are still in a standoff," the Taiwanese coast guard said in a statement.
The coast guard said that it "strongly condemns China's use of the Japan-Philippines negotiations as a pretext to conceal its attempts to create the illusion of 'jurisdiction'".
Taiwan has deployed seven patrol vessels to help with surveillance of the Chinese ships.
Tokyo and Manila said last month they would start formal talks "to delimit the maritime boundary" of an economic zone and continental shelf between them, angering Beijing.
On Saturday, Beijing's transport ministry organised maritime police from the coastal provinces of Fujian and Guangdong to "conduct a special maritime traffic law enforcement operation in waters east of Taiwan Island", state news agency Xinhua said.
The report did not give details on the operation, including how long it lasted or whether it was still ongoing, and it did not say whether maritime police sent ships to the area.
The operation was "a necessary action taken against Japan and the Philippines' unilateral announcement they would start 'negotiations on delimiting a maritime boundary'" near Taiwan, Xinhua added.
Taiwan said on Wednesday it should be consulted on the Japan-Philippines talks.
Manila and Tokyo's shared grievances over Chinese maritime territorial claims have seen them draw increasingly close in recent years.
Japan and China are in territorial and economic disputes in the East China Sea, where coast guard ships from both sides routinely stage tense standoffs.
Beijing has meanwhile deployed navy and coast guard vessels in the South China Sea in a bid to bar the Philippines from strategically important reefs and islands, leading to a string of confrontations.
Taiwan's coast guard said on Saturday that a Chinese survey vessel had joined a coast guard ship in waters around Pratas Island in the northern part of the South China Sea.
The Taiwanese coast guard said it was "the first observed instance of Chinese coast guard and survey vessels acting in coordination to provoke Taiwan".
Taiwan controls Pratas but Beijing also claims the island, along with most of the strategic waterway.