The ships of the Nanhai Fleet set sail from a military port in south China's Hainan Province for a drill in the South China Sea, state-run Xinhua news agency reported.
The drill, part of annual exercises, includes combat exercises in the West Pacific Ocean and the east Indian Ocean.
The three-ship flotilla consists of an amphibious landing craft and destroyer. It includes Changbaishan, China's largest landing ship by gross tonnage and is equipped with an advanced weapon system, the report said.
Fleet commander Jiang Weilie said this drill focuses on testing the combat ability of leading ships, submarines and aviation forces while exploring methods for normalised open sea drills.
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China claims almost all of South China Sea as its own.
Its claim is strongly contested by the Philippines, Vietnam, Malaysia and Brunei.
These countries along with the US criticised a law brought in by China's Hainan province saying, "foreigners or foreign fishing ships entering sea areas administered by Hainan and engaged in fishery production or fishery resource surveys should receive approval from relevant departments of the State Council."
Meanwhile, Chinese media today reported anti-China demonstrations in Vietnam over the disputed islands.
The demonstration was held in Hanoi coinciding with the anniversary of a 1974 battle between China and Vietnamese forces in the South China Sea during which China took complete control of the islands called Paracel by Vietnam and Xisha by China.
China argues that the island chain has been a traditional fishing area for Chinese for hundreds of years.
But he said Hanoi's approach is relatively mild as it still hopes to keep the issue controllable and avoid the dispute being upgraded, since Vietnam needs to develop through cooperating with China.