China on Friday defended its construction on disputed islands in the South China Sea as "normal", after a US think tank released new satellite images showing deployment of radar and other equipment.

Beijing claims nearly all of the sea and has been turning reefs in the Spratly and Paracel chains into islands, installing military facilities and equipment on them.

The Asia Maritime Transparency Initiative (AMTI) said the buildup continued this year despite rival claims across the sea from Vietnam, the Philippines, Malaysia, Brunei and Taiwan.

Responding to the report, foreign ministry spokesman Lu Kang said: "If China is conducting any peaceful construction activity or deploying necessary defence facilities, it's very normal because it's within our sovereignty."

"We believe that some individuals are making a fuss about this. They're trying to hype it up," Lu told a regular news briefing.

Over the course of 2017, China has been advancing the next phase of development with construction of infrastructure to support air and naval bases, such as underground storage areas and "large radar and sensor arrays", the Washington-based think tank said in a report on Thursday.

Fiery Cross Reef saw the most construction this past year, with building work spanning 27 acres, or about 110,000 square metres, AMTI said its analysis of satellite images showed.

There is now a high frequency radar array at the northern end of the island, it added.

Meanwhile, the official Xinhua news agency reported on Friday that China's southern island province of Hainan has revealed a satellite launch plan to "assist remote sensing coverage" over the South China Sea.

The mission will start in 2019 with the launch of three optical satellites, Xinhua cited the Sanyan Institute of Remote Sensing as saying.

The report follows recent moves by China to ease concerns among rival claimants around the sea, through which some $5 trillion in annual shipping trade passes.

Vietnam and China agreed last month during President Xi Jinping's visit to Hanoi to avoid conflicts in the hotly contested waters.

At a meeting with the 10-member Association of Southeast Asian Nations in November, China and ASEAN countries agreed to begin talks on a much-delayed code of conduct for the sea.

The Philippines had for many years stood alongside Vietnam as one of the region's strongest opponents to Chinese expansionism.

Following Manila's complaint to a United Nations-backed tribunal, the panel ruled last year that China's territorial claims in the sea were without legal basis.

But the Philippines, after President Rodrigo Duterte took office last year, decided not to use the ruling to pressure China.

He instead chose to build closer ties in return for billions of dollars in investments and aid.

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