Several countries have conflicting claims of oil and gas reserves in the South China Sea. China and Taiwan claim nearly all of the sea while Brunei, Malaysia, the Philippines and Vietnam have claims on parts near their shores.
A statement from the U.S. Department of State released Friday said the United States government is concerned by the increased tensions in the South China Sea and is monitoring the situation closely.
"In particular, China's upgrading of the administrative level of Sansha City and establishment of a new military garrison there covering disputed areas of the South China Sea run counter to collaborative diplomatic efforts to resolve differences and risk further escalating tensions in the region," the statement said.
Chinese Foreign Ministry spokesman Qin Gang said China has indisputable sovereignty over the Nansha Islands and their adjacent waters in the South China sea and express dissatisfaction with the statement from the United States, Xinhua reported.
The U.S. statement "completely ignored the facts, deliberately confounded right and wrong, and sent a seriously wrong signal, which is not conducive to the efforts safeguarding the peace and stability of the South China Sea and the Asia Pacific region," Qin said Saturday.
"Setting up Sansha city is the Chinese government's necessary adjustment of the current administrative agencies, which is completely within China's sovereignty," he added.
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