China has denied reports
its military forces are preparing for war amid tensions over a disputed
territory in the South China Sea.

The statement comes despite warnings to the
Philippines that military conflict is possible over a reef known as the
Scarborough Shoal.Ships from China and the Philippines have been confronting each other for more than a month over the shoal.

Both sides accuse the other of intruding into territorial waters.

Reports that the Guangzhou military region, the South China
Sea fleet and other units have entered a state of war preparedness are
untrue," the ministry said in a brief statement.

Fears of an armed clash escalated when the Chinese army's own
newspaper warned the military should not be treated as a paper tiger.
That led to excited rumors on Chinese internet sites that
the navy was preparing for action and that the Guangzhou military
command in the south of the country was on a war footing.
Hardline elements in the leadership appear to be losing patience
with the defiant approach of a much smaller neighbor.
Analysts say the central government may see an opportunity to deflect attention from its internal problems.

Intentions are far from clear - and the competing interests of maritime
agencies and the military mean its next step is hard to predict, our
analyst adds.