China is set to build a naval base in Pakistan as tensions are rising between Islamabad and Washington over the US cutting aid funds.

According to the South China Morning Post on Saturday, the naval base will be built in Gwadar Port, in the Pakistani province of Balochistan, as military vessels require “specific services” which cannot be provided by the present commercial facility.

“Gwadar port can’t provide specific services for warships… Public order there is in a mess. It is not a good place to carry out military logistical support,” said one of the sources.

A China-based military analyst, Zhou Chenming, told the newspaper that China needs to build a base in Gwadar for its warships as the port has turned into a civilian facility.

On Friday, Pakistan denounced as "counterproductive" Washington’s decision to suspend millions of dollars in security aid to Islamabad.

The statement came a day after US State Department spokeswoman Heather Nauert said at least $900 million in security assistance to Pakistan would be suspended until the government in Islamabad addressed the issue of the Afghan Taliban and the Haqqani network militant groups. She declined to put a figure on exactly how much aid would be suspended.

Last week, US President Donald Trump threatened to cut off foreign aid to Pakistan, accusing Islamabad of harboring violent extremists.

SS