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Beijing, July 24 (IANS) China Tuesday established a new city on an island that is in the disputed South China Sea.

The city of Sansha on Yongxing island is in the southernmost province of Hainan, reported Xinhua.

A ceremony to mark the city's establishment took place on a square in front of the city government's main building.

The national flag was hoisted while the national anthem played after the signboards of the Sansha Municipal Government and the Sansha Municipal Committee of the Communist Party of China were unveiled.

Sun Shaochi, vice minister of civil affairs, announced the State Council's approval of the establishment of the city.

China claims sovereignty over the South China Sea and contests Vietnamese claims to two strategic islands and its exclusive economic zones.

Luo Baoming, party chief of Hainan province, said in a keynote speech that Sansha was established to administer the Xisha, Zhongsha and Nansha islands and their surrounding waters in the South China Sea.

"The provincial government will be devoted to turning the city into an important base to safeguard China's sovereignty and serve marine resource development," he said.

He said the main task now will be to build up political power in Sansha to ensure efficient management.