It was not the display of naval might that China's President Xi Jinping would have envisioned.

Key points: China held a parade to mark 70 years since the founding of the country's navy

China held a parade to mark 70 years since the founding of the country's navy President Xi Jinping is overseeing a major overhaul of China's navy which could make it the world's largest

President Xi Jinping is overseeing a major overhaul of China's navy which could make it the world's largest Experts believe the Chinese navy could have 100 more warships than the US by 2030

At one point, the pride of China's fleet — its 304-metre air craft carrier the Liaoning — was almost impossible to see from close range, as thick fog shrouded the country's biggest-ever naval gathering.

Formations of air force jets could be heard but not seen as low clouds literally rained on the parade.

But while the unpredictable weather off the coast of the port city of Qingdao ruined the spectacle, the continuous lines of increasingly advanced submarines and warships conveyed a clear message: China has arrived as a naval power.

One of China's destroyers could just be seen through the fog. ( ABC News: Steve Wang )

The country's President and military chief Xi Jinping tried to assure the world his intentions are peaceful, despite mounting concerns about China's assertive approach to territorial disputes.

"The Chinese military is committed to creating a security environment featuring equality, mutual trust, fairness and justice, joint participation and shared benefits," the President said before observing the fleet from one of China's most modern destroyers.

As the ships moved past him in the grey drizzle, he would have made out a Royal Australian Navy flag — a sight seldom seen in this part of the world — flying above Australia's contribution to China's military showpiece.

HMAS Melbourne is taking part in this week's events to mark 70 years since the Communist Party's Red Army founded its naval arm.

The Royal Australian Navy frigate HMAS Melbourne arrived in Qingdao for the parade on Sunday. ( AP )

Another 12 countries sent ships on goodwill missions for the parade including wartime enemy Japan, rising rival India and even Vietnam — the only country to have experienced a naval battle with the PLA Navy.

China now launching more ships than US

A Chinese military spokesman said the international participants show this isn't a Chinese muscle-flexing display.

But a check of China's rapidly growing fleet tells another story.

"China's naval build-up and modernisation is unprecedented in both its ambition and speed, said Adam Ni, a Chinese military researcher with Macquarie University.

"By some estimates, China already has the biggest navy in the world by quantity."

Since President Xi Jinping came to power in late 2012, China has overtaken the US in both the number and total tonnage of vessels launched each year.

Chinese media reported last year that the speed of military development surpassed that of all other countries, claiming the number of 'modern' naval surface ships had gone from just eight in 1999 to 127 in two decades.

An analysis from the International Institute of Strategic Studies puts China's total fleet, including smaller craft and older ships, at 300 vessels.

The US navy is still ahead with a fleet of 490 vessels, but only 287 were ready to be deployed for battled in 2018.

The Royal Australian Navy has 48.

"Quantity is not everything," said Adam Ni.

"Chinese ships are improving fast with advanced weaponry and other technology, but they are generally less capable than their US counterparts and their crew less experienced," he said.

Naval missions to China's first overseas base in Djibouti and in the South Pacific have become increasingly common, but China's government said the rapid naval build up is mainly defensive.

"China's main interest is its territorial integrity, it's about sovereignty," said Xu Qinduo, a Beijing-based commentator with a government-linked think tank called Pangoal Institution.

"Sometimes people use the term 'expansive' for China's military or foreign policy, but I'd say that's not exactly accurate," he said.

'Maritime militia' adds to China's strength on the seas

President Xi Jinping is overseeing a sweeping plan to refurbish the Chinese military by developing everything from stealth jets to aircraft carriers. ( AP: Xinhua/Li Gang )

China is currently involved in territorial disputes with Japan over a set of islands, and with the Philippines, Malaysia, Brunei and Vietnam in the South China Sea.

In most cases it is not China's navy, but rather its Coast Guard and a fleet of government-subsidised fishing boats known as the 'maritime militia' that pressure rivals and enforce China's claims.

In recent weeks, the Philippines officially complained about the presence of almost 300 Chinese fishing boats that had reportedly spent months surrounding a Philippines-occupied reef.

"China can call upon the massive Coast Guard and maritime militia to support the navy, meaning in waters close to China, it has an overwhelming superiority in numbers," said Adam Ni.

China has less experienced naval crews, according to analysts. ( ABC News: Steve Wang )

Many military analysts believe the navy will continue pumping out ships at a rate of two to three times that of the US in the coming years, and could have 100 more warships than the US by 2030.

"Whether China can stay on this trajectory, given looming maintenance costs and downside risks to its economy...is another question," said US-based analyst Andrew Erickson.

For now though, the shipbuilding continues, as do China's efforts to assure its neighbours across the region there's no reason to worry.