Those targeted include former US Commerce Secretary, Wilbur Ross.
The counter-sanctions come days before US Deputy Secretary of State Wendy Sherman is due to visit China.
The US sanctions on Chinese officials in Hong Kong were because of their role in the security crackdown in the territory.
Washington also warned its business community of the growing risks of operating in Hong Kong.
China introduced the National Security Law in Hong Kong last year in response to massive pro-democracy protests. It criminalises secession, subversion and collusion with foreign forces and carries a maximum sentence of life in prison.
China’s foreign ministry said on Friday that the recent US sanctions were designed to “groundlessly smear Hong Kong’s business environment” and “gravely violate international law and basic norms governing international relations”.
It said it would impose sanctions on seven US individuals and entities including Mr Ross.
As commerce secretary under former President Donald Trump, Mr Ross expanded the number of firms that could not trade with American firms without a prior license, including Chinese telecom giants like Huawei and ZTE.
Others sanctioned by China include Sophie Richardson, Human Rights Watch’s China director; Carolyn Bartholomew, chair of US-China Economic and Security Review Commission; and Adam King of the International Republican Institute.
White House press secretary Jen Psaki told reporters that the US was “undeterred” by China’s retaliation.
“These actions are the latest examples of how Beijing punishes private citizens, companies and civil society organisations as a way to send political signals,” she said.
The relationship between Beijing and Washington became even more strained under the Trump administration. They remain sour on issues including the origins of Covid-19, human rights and cybersecurity.
This weekend, Ms Sherman will travel to China in an effort to address deteriorating ties. It will be the most senior official visit under President Joe Biden.
Mr Ross is just the latest former member of the Trump administration to be hit with sanctions by China. In January, it announced sanctions against outgoing Secretary of State Mike Pompeo and 27 other top Trump officials.
The Biden administration called that move “unproductive and cynical”. (Courtesy BBC)