Beijing commenced two days of war games, dubbed "Joint Sword-2024A", as a "strong punishment" for Taiwan's "separatist acts".
They come after the island swore in President Lai Ching-te, who said in his inaugural speech on Monday that Taiwan "must demonstrate our resolution to defend our nation".
China -- which claims Taiwan as part of its territory -- has denounced Lai's speech as a "confession of independence".
Beijing's drills began Thursday morning and are taking place in the Taiwan Strait and to the north, south and east of the island, China's People's Liberation Army (PLA) said.
In response, Taiwan's armed forces dispatched "aerial, naval and land assets", Taipei's defence ministry said in a statement.
Four fighter jets took off at around 1:00 pm (0500 GMT) from a military airbase in Hsinchu, an hour southwest of Taipei.
Taipei's ministry of defence said around 8:00 pm (1200 GMT) it had detected 49 Chinese fighter jets and air patrol planes around Taiwan since 7:20 am -- the highest number of Chinese aircraft observed around the island in a single day so far this year.
The defence ministry said earlier in the day it had detected 15 Chinese warships and 16 coast guard vessels.
The closest they got to Taiwan was about 24 nautical miles (44 kilometres), said senior intelligence official Huang Wen-chi, adding that the military has "not detected any use of live ammunition".
Ministry spokesman Sun Li-fang said China's exercises were "destructive" to regional peace and stability in the Taiwan Strait.
During a visit to a military base, Lai said he would "stand on the front line... to jointly defend national security".
"At this moment the international community is paying a lot of attention to democratic Taiwan," the president said in a speech that did not directly reference the Chinese drills.
"Faced with external challenges and threats, we will continue to defend the values of freedom and democracy, and safeguard peace and stability in the region."
- 'Leave right away' -
Self-ruled Taiwan is separated by a narrow 180-kilometre (110-mile) strait from China, which has said it would never renounce the use of force to bring the island under Beijing's control.
Taipei's coast guard said it had encountered Chinese ships around the Taiwan-administered outlying islands of Dongyin and Wuqiu early Thursday morning.
Two Chinese coast guard ships had sailed into the "restricted waters of Dongyin" at 7:48 am, while another was outside the restricted zone to "provide support", Taipei's coast guard said.
The ships left waters off Dongyin -- around 160 kilometres from Taiwan's northern tip -- about an hour later.
Another two Chinese ships were detected around Wuqiu, about 130 kilometres from Taiwan's western coast, "entering restricted waters", with a third outside the restricted area, the coast guard said. The vessels left at around 8:45 am.
Footage released by the coast guard showed Taiwanese officers ordering Chinese ships to leave over a loudspeaker.
"Your movements affect our country's order and safety, please turn away and leave our restricted waters as soon as possible," an officer said, according to the coast guard video.
"Leave right away, leave right away!"
The incidents near Dongyin and Wuqiu marked the seventh time this month that Chinese vessels breached Taiwan's restricted waters.
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