"After friendly consultations between the Chinese and US sides, the handover work for the US underwater drone was smoothly completed in relevant waters in the South China Sea at midday on December 20," a brief Chinese Defence Ministry statement said without providing details.
The drone operated by a US survey ship in the South China Sea(SCS) was seized by a Chinese navy vessel which reportedly declined to hand it over despite request from the American ship.
"This incident was inconsistent with both international law and standards of professionalism for conduct between navies at sea," Pentagon Press Secretary Peter Cook said in a statement.
"The US has addressed those facts with the Chinese through the appropriate diplomatic and military channels, and have called on Chinese authorities to comply with their obligations under international law and to refrain from further efforts to impede lawful US activities," he said.
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The Pentagon statement said the US Navy drone was "conducting routine operations in the international waters of the South China Sea in full compliance with international law."
The incident led to a major spat between Trump and the Communist giant.
"China steals United States Navy research drone in international waters -- rips it out of water and takes it to China in unprecedented act," Trump had tweeted.
The next day he tweeted again to say, "We should tell China that we don't want the drone they stole back - let them keep it!"
China rejected Trump's charge that it "stole" the drone, saying the device was picked up to prevent "harm" to freedom of navigation in the disputed South China Sea, from where Beijing claims the US is spying on Chinese coast.
Hua also denied US allegations that the Chinese naval ship picked the drone up and took it away despite messages from the US survey ship USNS Bowditch which controlled the drone.
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"What is truly amazing about this (Trump) tweet, was the soon-to-be US president completely misrepresented what had actually happened -- that is more dangerous than funny," an editorial in the state-owned China Daily newspaper had said.
Hua, at her briefing yesterday, said, "As really what happened you can see from Defence Ministry statement that the Chinese navy found this unidentified device and examined in a professional manner to verify it."
"I think this is easy to understand. Just imagine that you found something on the street and you to first check and verify it before handing it back to someone else. So I believe it is something easy to understand," Hua said.
US military said the drone was taken away from outside the nine dash line of the South China Sea.
The line in the Chinese maps indicates China's claims over the area, which is disputed by the Philippines, Malaysia, Vietnam, Brunei and Taiwan.