The commander of the People's Liberation Army Navy Wu Shengli and visiting US Chief of Naval Operations John Richardson meet in Beijing for maritime safety issues on Monday, July 18, 2016.
China's is threatening to hold regular combat air patrols in the South China Sea, just under one week after an worldwide tribunal ruled against Beijing's claim to ownership of the disputed waterway.
Beijing has repeatedly blamed the United States for stirring up trouble in the South China Sea, where its territorial claims overlap in parts with Vietnam, the Philippines, Malaysia, Brunei and Taiwan.
China, which did not take part in the proceedings in the case initiated by the Philippines in 2013, has refused to recognise the ruling and also criticised countries like the U.S. and Japan for urging it to do so.
An estimated $5 trillion in global trade passes each year through the South China Sea, which is home to rich fishing grounds and a potentially vast wealth of oil, gas and other natural resources.
Following the ruling, Beijing has been on the offensive, claiming the support scores of countries and saying it will not follow the verdict.
Philippine President Rodrigo Duterte ended his unusual silence at a private function late on Thursday and said he wanted dialogue with China and was considering sending former President Fidel Ramos to Beijing to get the ball rolling.
"When has freedom of navigation in the SCS ever been affected?"
It could be the first step toward a diplomatic solution to tensions that have been building up since China expelled Filipino fishermen from Scarborough Shoal in 2012, and constructed seven island outposts on disputed reefs.
In a veiled threat to the US, China's Adm Sun Jianguo, deputy chief of the Joint Staff Department of the Central Military Commission, warned that such actions could do more harm instead.
However, the location of the exercises remains at a respectable distance from the Paracel Islands, and above all extremely far from the Spratly islands, which are located south and are at the heart of the disputes between China and its neighbors.
The ruling, which was welcomed by the US and other countries, invalidated China's sprawling territorial claims under the United Nations Convention on the Law of the Seas, regarded as the constitution governing the use of the world's oceans. China demarcated its South China Sea in 1947 with a U-shaped line made up of 11 dashes on a map covering most of the area.
Sun also said the court case at The Hague must be used by China's armed forces to improve its capabilities "so that when push comes to shove, the military can play a decisive role in the last moment to defend our national sovereignty and interests".
"We really covered the entire spectrum of our relationship - from those areas where our cooperation and collaboration is doing very well, such as participation in RIMPAC, areas such as port visits, areas such as use of the CUES arrangement to regulate our encounters at sea and keep them safe and professional", Richardson said in an audio statement distributed by the Navy.