The US Navy has said that one of its nuclear powered submarines had an underwater collision with an unidentified object.
What the US Navy said about the submarine incident
There have been no life-threatening injuries and the vessel is still fully functional.
"The submarine remains in a safe and stable condition. USS Connecticut's nuclear propulsion plant and spaces were not affected and remain fully operational," the statement said.
The US Navy said the extent of the damage is being assessed and the incident is being investigated.
The vessel is a Seawolf-class nuclear powered, fast attack submarine that musters under the US Navy's Pacific Fleet. It is understood to be heading to the US base in Guam for further assessment.
The drills are aimed at countering the threat posed by China's growing military presence in the disputed territory.
In September, the US, United Kingdom and Australia announced an Asia-Pacific security pact to address regional security concerns. The pact has been heavily criticized by Beijing.
China considers most of the waters which lie on key shipping routes to fall under its control. These territorial claims are contested by countries in the region.
In recent days China has flown fighter aircraft towards Taiwan, which has heightened tensions considerably.
Citing anonymous sources familiar with the matter, Reuters news agency reported that small numbers of US special operations forces are in Taiwan to carry out training of local forces. Neither the US or Taiwan's defense chiefs could provide any further detail on the matter.
The US has told China that its growing military activity in the region is a destabilizing factor.
Several countries have also accused China of intimidation.