Taiwan President Lai Ching-te asked China on Monday to stop its military and political threats, saying in his inauguration speech that peace is the only choice and that Beijing had to respect the choice of the Taiwanese people.
China responded by saying Lai had sent "dangerous signals" that seek to undermine peace and stability across the Taiwan Strait.
Lai, addressing the crowd outside the Japanese-colonial-era presidential office in central Taipei, repeated a call for talks with China, which views the proudly democratic island as its own territory and has never renounced the use of force to bring it under Beijing's control.
"I also want to urge China to stop intimidating Taiwan politically and militarily, and to take on the global responsibility with Taiwan to work hard on maintaining peace and stability across the Taiwan Strait and in the region, to ensure the world is without the fear of war breaking out," he said. "We also want to declare this to the world: Taiwan makes no concessions on democracy and freedom. Peace is the only option and prosperity is our goal for long-term peace and stability."
China's Taiwan Affairs Office said Lai's comments "fully exposed his true nature as a Taiwan independence worker", adding that the situation in the Taiwan Strait was "complicated and grim".
"Taiwan independence is incompatible with peace in the Taiwan Strait," it said in a statement. "No matter how the situation on the island changes, no matter who is in power, it will not change the fact that the two sides belong to the same China."
China repeatedly called Lai a "separatist" who risked war in the run-up to his election in January.
Taiwan has faced pressure from China, including regular air force and navy activities near the island, since the election victory by Lai, 64, who is widely known by his English name, William.
Lai, who took over from Tsai Ing-wen having served as her vice president for the past four years, said people must be realistic about the threat and Taiwan must show its determination to defend itself.
"Fellow citizens, we have the ideal to pursue peace, but we must not have illusions," he said. "Before China gives up using force to invade Taiwan, citizens must understand this: Even if we accept all of China's claims and give up our sovereignty, China's ambition to annex Taiwan will not disappear."
Lai received loud applause after reiterating that the Republic of China - Taiwan's formal name - and the People's Republic of China are "not subordinate to each other", a line Tsai also took.
Taiwan's defence ministry, in its daily report on Monday about Chinese military activities in the previous 24 hours, said six Chinese aircraft had crossed the Taiwan Strait's median line, which previously served as an unofficial boundary but that China says it does not recognise.
At least one of the aircraft got within 80 kilometres of the northern Taiwanese port city of Keelung, according to a map provided by the ministry. Such incursions have become relatively common in recent years.
In attendance at the ceremony are former US officials dispatched by President Joe Biden, lawmakers from countries including Japan, Germany and Canada, and leaders from some of the 12 countries that still maintain formal diplomatic ties with Taiwan, such as Paraguay President Santiago Pena.
US Secretary of State Antony Blinken congratulated Lai, saying the United States looked forward to working with him "to advance our shared interests and values, deepen our longstanding unofficial relationship, and maintain peace and stability across the Taiwan Strait".