The waters around the islands in the East China Sea are rich fishing grounds and have potentially huge oil and gas reserves.
Vietnam, Taiwan, Brunei, Malaysia and the Philippines also have conflicting claims with China in parts of the South China Sea. China lays claim to almost the whole of the sea, which is criss-crossed by crucial shipping lanes.
The U.S. shift comes as China boosts military spending and builds submarines, surface ships and anti-ship ballistic missiles as part of its naval modernisation, and has tested emerging technology aimed at destroying missiles in mid-air.
China has repeatedly said the world has nothing to fear from its military spending, which it says is needed for legitimate defensive purposes in a complex and changing world, and that the sums spent pale in comparison with U.S. defence expenditure.