China has begun building a school on the contested Paracel islands, state media reported, as the Asian giant further asserts its claims in escalating territorial disputes in the South China Sea.

The school on Chinese-held Sansha or Woody Island will serve about 40 children whose parents work there, the official news agency Xinhua reported on Saturday, adding that construction will cost about 36 million yuan ($5.8 million) and take a year and a half.

China established Sansha as a city in 2012 to administer a wide swathe of waters and islands in the South China Sea, creating an oddity that is by far the world's largest city by area but has a minuscule population of around 1,000 people.

Parts of the South China Sea, which is home to key shipping routes and is believed to sit atop vast gas deposits, are also claimed by the Philippines, Vietnam, Malaysia, Brunei and Taiwan.

But Beijing claims the waters almost in their entirety and is engaged in increasingly bitter rows with its neighbours over their sovereignty.

China placed an oil rig in disputed waters near the Paracel islands in May, sparking deadly anti-Chinese riots in Vietnam.

Sansha hosts a military garrison and this year began setting up a patrol system intended in part to "safeguard national sovereign rights". Expanded infrastructure and tourism are in the works, domestic media have reported.

Relations between China and Vietnam have plummeted over the oil rig row, with Beijing saying on Friday that Vietnamese ships have rammed its vessels more than 1,500 times since early last month.

US aircraft carrier welcomes PLA aboard, seeks return invite
Aboard Uss George Washington, Hong Kong (AFP) June 15, 2014 – The US Navy on Sunday welcomed four members of China's military aboard one of its aircraft carriers — and said it hoped to receive a return invite someday.

The four People's Liberation Army members were among guests flown by a C-2 Greyhound aircraft to the USS George Washington for a "VIP visit" before it berths Monday off Hong Kong on a routine call.

Tensions are high in the South China Sea and East China Sea as Beijing asserts its sovereignty over reefs and islands also claimed by US allies such as Japan and the Philippines.

But Rear Admiral Mark C. Montgomery, commander of the task force headed by the carrier, said US-Chinese military relations have "moderately improved" in the past six months.

China last week confirmed it would take part for the first time in a major US-organised naval drill, the Rim of the Pacific multinational exercise, later this month.

In May China's military chief toured American warships in the United States despite the heightened tensions in Southeast Asia.

Hong Kong also has continued to host visits by US warships despite reverting to Chinese sovereignty in 1997.

A general from the PLA's Hong Kong garrison was among those visiting the George Washington Sunday as it sailed 200 miles south of the city.

Montgomery said it might now be appropriate for Beijing to return the favour by offering a visit to its sole carrier, the Liaoning.

"I think that in an effort towards increased transparency in a broad bilateral partnership, I think a US visit would be appropriate," he told AFP and other media visiting the ship.

Guests were treated to a display of take-offs and landings by some of the carrier's F/A-18 Super Hornet fighter aircraft.

But Montgomery declined comment on the US decision to send another aircraft carrier to the Gulf as the situation in Iraq worsens.

And he called for a diplomatic solution to the territorial issues in the South China Sea.

"Principally the role of the United States Navy is to serve as a stabilising force and demonstrate US commitment to the region overall," he said.