US blacklists Chinese individuals and firms for South China Sea work

The USS Ronald Reagan (CVN 76, front) and USS Nimitz (CVN 68, rear) Carrier Strike Groups sail together in formation, in the South China Sea. AP

The United States announced sanctions and restrictions on 24 Chinese companies and associated officials on Wednesday for taking part in building artificial islands in disputed waters in the South China Sea.

"Since 2013, the PRC has used its state-owned enterprises to dredge and reclaim more than 3,000 acres on disputed features in the South China Sea, destabilizing the region, trampling on the sovereign rights of its neighbors, and causing untold environmental devastation," Secretary of State Mike Pompeo said in a statement.

It comes as the Philippines' foreign minister said on Wednesday that the United States military presence in Asia is needed as the rivalry between Washington and Beijing intensifies.

The two powers are arguing over issues from trade to what the United States sees as aggressive moves by China's armed forces, especially in the disputed South China Sea and around Chinese-claimed Taiwan.

"We have a balance of power situation," Foreign Minister Teodoro Locsin said in an interview with ANC News Channel. "We need the US presence in Asia".

The United States has long opposed China's territorial claims on the South China Sea, regularly sending warships to demonstrate freedom of navigation there.

It hardened its position last month by rejecting Chinese maritime claims in the South China Sea, a move which China condemned.

Mr Locsin said it would be in the Philippine's interest for the the United States to maintain its military presence in the region and he reiterated the country "never stopped cooperation" with its long-time security ally.

In June, President Rodrigo Duterte suspended his decision to scrap a two-decade-old troop deployment agreement with the United States that has given the Philippines access to scores of annual training exercises, including expertise in tackling Islamist militants and maritime threats.

The US military also formerly had two huge military bases in the Philippines - Subic Bay and Clark - but was evicted from them in 1992.

The two countries revived close ties from 2000 with war games, frequent visits and by helping against communist and Muslim insurgents.