China has lodged a formal complaint with the US after an American spy plane flew over a reef in the South China Sea, where Beijing was carrying out construction work.

Chinese navy dispatchers ordered the aircraft to leave the area around Fiery Cross Reef on Monday.

A Chinese foreign ministry spokeswoman described the presence of US surveillance aircraft as dangerous and irresponsible and said the US could not ignore China's rights.

"China's will to maintain sovereignty and territorial integrity is as solid as a rock," she said.

"We urge the US to make corrections, keep their rationality and stop any provocative actions."

China claims most of the South China Sea as its territory — through which $5 trillion in ship-borne trade passes every year — but several other countries, including US ally Taiwan, have competing claims.

Taiwan's president is due to propose a peace initiative on Tuesday to resolve territorial disputes in the South China Sea, the official Central News Agency reported.

It said president Ma Ying-jeou's plan would be along the lines of his 2012 proposal for the East China Sea, which called on claimants to temporarily shelve their disagreements to enable negotiations on resource-sharing.

Philippines to fly over disputed South China Sea: Aquino

Meanwhile, Philippine military and commercial aircraft will keep flying over disputed areas in the South China Sea despite Chinese warnings over the airspace, president Benigno Aquino said on Monday.

"We will still fly the routes that we fly based on the international law from the various conventions we entered into," Mr Aquino told reporters when asked whether the Philippines accepted China's position.

The Chinese military last week ordered a US Navy P-8 Poseidon surveillance plane away from airspace above the disputed Spratly islands in the South China Sea.

The Chinese foreign ministry later insisted it had sovereign rights to those waters, maritime features and the airspace above.

The Philippines says it will fly its aircraft over disputed areas in the South China Sea despite Chinese warnings. ( AFP: Jay Directo )

In recent years it has caused alarm with increasingly aggressive actions to assert its claims.

It is undertaking giant land reclamation works in the Spratlys, located between the Vietnam and the Philippines, to turn reefs into islands that can host airstrips and other military facilities.

The Spratlys, about a thousand kilometres from the nearest major Chinese landmass, are one of the biggest and most strategically important archipelagos in the sea.

Mr Aquino said the Philippines would not give up its territory to China, even as he acknowledged major differences in the capabilities of their militaries.

"We will still exercise our rights over our exclusive economic zone," he said.

"Bottom line is, it has to be clear, we will defend our rights to the best of our abilities."

Mr Aquino said the Philippines was also working closely on the issue with the US, his nation's long-time ally and mutual defence treaty partner, but declined to elaborate.

"Even in basketball, you don't reveal all your moves to the other coach," he said.

Vietnam, Malaysia, and Taiwan also have military facilities on Spratly islands that they control.

South-East Asia maritime build-up accelerates

South-East Asian nations have prioritised spending on their navies and coastguards amid rising tensions in the South China Sea.

Annual defence spending in South-East Asia is projected to reach $52 billion by 2020, from an expected $42 billion this year, according to IHS Janes Defence Weekly.

The 10 nations of South-East Asia were expected to spend $58 billion on new military kit over the next five years, with naval procurement comprising a large chunk, it said

Much of this equipment is likely to be used in and around the South China Sea, where Beijing's creation of artificial islands has stoked tension.

"As their capabilities in the maritime space expand, it means the range and lethality of (South-East Asian) strike forces will also increase," said Tim Huxley, executive director of the International Institute of Strategic Studies in Asia

"If there is a confrontation and it escalates, there is a potential for a more lethal conflict."



ABC/wires