Chinese Foreign Ministry spokesperson Lu Kang said in a statement late last night that China had dispatched military vessels and fighter planes in response to warn off the US vessel.
Yesterday, the missile destroyer USS Stethem "trespassed China's territorial waters off the Xisha Islands", state run Xinhua news agency reported.
The US behaviour constitutes a serious political and military provocation, Lu said, stressing that the Chinese side is strongly dissatisfied with and firmly opposed it.
While China claims sovereignty over almost all of the South China Sea, the other countries to partially counterclaim over the area are Vietnam, Philippines, Malaysia, Brunei and Taiwan.
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This is the second US naval ship to have passed the disputed islands after President Donald Trump came to power.
The US has been periodically sending the naval ships and planes to the South China Sea to assert freedom of navigation challenging China's claims of sovereignty.
Lu said the Islands are an inherent part of the Chinese territory, noting that in accordance with the Law of China on the Territorial Sea and the Contiguous Zone, the Chinese government promulgated the baseline of the territorial sea off the Xisha Islands in 1996
"The relevant Chinese law has explicit provisions on foreign military vessels' entry into the territorial sea of China," Lu said.
Under the pretext of "navigation freedom," the US once again sent a military vessel into China's territorial waters off the Xisha Islands without China's approval, Lu said.
China says there are problems for international navigation through the SCS but objects to defence vessels going through it.
Working together, China and ASEAN member states have cooled down and improved the situation in the South China Sea Lu said charging US of deliberately stirring up troubles in the South China Sea. The US is running in the opposite direction from countries in the region who aspire for stability, cooperation and development, he said
The US missile destroyer sailing close to the contentious island chain is the latest in a series of events that add to the growing unease in the relations between the two countries.
Last week Trump authorised a new arms sale to Taiwan, which China considers a rebel province, besides slapping sanctions on a Chinese bank accused of laundering North Korean cash.