The Pentagon sounded a warning over China's plans to introduce floating nuclear power plants on disputed islands and reefs in the South China Sea, part of an annual report assessing the nation's military strength.

"China's plans to power these islands may add a nuclear element to the territorial dispute," the Pentagon said in its 2018 report to Congress titled Military and Security Developments Involving the People's Republic of China. "China indicated development plans may be under way to power islands and reefs in the typhoon-prone South China Sea with floating nuclear power stations; development reportedly is to begin prior to 2020."

The China Securities Journal, a Chinese state-run financial newspaper, said in 2016 that China could build as many as 20 floating nuclear plants to "speed up the commercial development" of the South China Sea, the South China Morning Post reported last year. Several Chinese state-run companies last year established a joint venture that aims to strengthen China's nuclear power capabilities in line with its ambitions to "become a strong maritime power", the newspaper said, citing a statement released by the venture.

China's man-made Subi Reef in the Spratly chain of islands in the South China Sea. BULLIT MARQUEZ

The Pentagon report also said China's military had expanded its bomber operations in recent years while "likely training for strikes" against the United States and its allies.

The assessment, which comes at a time of heightened US-China tensions over trade, highlighted China's efforts to increase its global influence, with defence spending that the Pentagon estimates exceeded $US190 billion ($262 billion) in 2017.