The triangular chain of reefs and rocks, known as Huangyan Island in China, has been a flashpoint between the countries since China seized it from the Philippines in 2012.

It lies 240 kilometres (150 miles) west of the Philippines' main island of Luzon and nearly 900 kilometres from Hainan, the nearest major Chinese land mass.

In August, a Chinese navy vessel dramatically collided with a ship from its own coast guard while chasing a Philippine patrol boat near Scarborough Shoal.

In a statement released on Wednesday, China's State Council said establishing the reserve at Scarborough Shoal was "an important measure for maintaining the diversity, stability, and sustainability of the natural ecosystem of Huangyan Island".

It also urged "intensifying supervision and law enforcement of all illegal and irregular activities involving the nature reserve".

The reserve's boundaries would be announced separately by the National Forestry and Grassland Administration, it said.

China claims almost the entirety of the South China Sea, through which more than 60 percent of global maritime trade passes, despite a 2016 court ruling that said its claims had no basis in international law.

Its claims overlap with those of the Philippines, Vietnam, Malaysia, and others.