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The US Navy missile destroyer Chafee entered into China's territorial waters near the Paracel Islands on Tuesday, according to Beijing's foreign ministry.
China immediately dispatched military vessels and aircraft for identification and warned the US ship to leave, ministry spokeswoman Hua Chunying told a regular briefing.
"The US vessel action violated Chinese laws and relevant international laws, undermined China's sovereignty and security interests," Hua said.
"China is firmly opposed to that and has lodged stern representations with the US," Hua said, using the term for official diplomatic protests.
If confirmed by the United States, it would be the fourth "freedom of navigation" operation (FONOP) carried out by the US Navy since President Donald Trump took office in January.
A US defence ministry spokesman refused to confirm the manoeuvre.
But he said all operations are conducted in accordance with international law and "demonstrate that the United States will fly, sail, and operate wherever international law allows".
"We are continuing regular FONOPS, as we have routinely done in the past and will continue to do in the future," Lieutenant Colonel Chris Logan said in a statement.
Vietnam, the Philippines, Malaysia, Brunei and Taiwan also claim territory in the vast sea.
However, Hua said: "The Chinese government will continue to safeguard its territorial sovereignty and maritime entitlements. We urge the US to respect Chinese sovereignty and security interests.