China already has the largest navy in the world, with more than 370 ships, and it has embarked on production of a new generation of nuclear-armed submarines.

A senior US defence official, speaking on condition of anonymity, said China’s new first-in-class nuclear-powered attack submarine sank alongside a pier sometime between May and June.

A Chinese embassy spokesman in Washington said they had no information to provide.

“We are not familiar with the situation you mentioned and currently have no information to provide,” the Chinese official said.

The official said it was not clear what caused it to sink or whether it had nuclear fuel on board at the time.

“In addition to the obvious questions about training standards and equipment quality, the incident raises deeper questions about the People’s Liberation Army (PLA)’s internal accountability and oversight of China’s defence industry, which has long been plagued by corruption,” the official said.

“It’s not surprising that the PLA Navy would try to conceal” the sinking, the official added.

Speaking in Taipei on Friday, Taiwan defence minister Wellington Koo said authorities “have a grasp of the situation through multiple intelligence and surveillance methods”, but did not elaborate.

Taiwan, which China views as its own territory, keeps a close watch on the latter’s military activities. In June, pictures appeared online of a Chinese nuclear submarine surfacing in the Taiwan Strait near Taiwan fishermen.

The Chinese submarine news was first reported by the Wall Street Journal.

A series of satellite images from Planet Labs from June appear to show cranes at the Wuchang shipyard, where the submarine would have been docked.

As of 2022, China had six nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines and 48 diesel-powered attack submarines, according to a Pentagon report on China’s military. That submarine force is expected to grow to 65 by 2025 and 80 by 2035, the US defense department has said.

On Wednesday, China said it had successfully conducted a rare launch of an intercontinental ballistic missile into the Pacific Ocean, a move likely to raise international concerns about the country’s nuclear build-up.

The US and China held theatre-level commander talks for the first time earlier this month, amid efforts to stabilise military ties and avoid misunderstandings, especially in regional hot spots such as the South China Sea.