China’s coastguard seized Sandy Cay, a disputed reef near the Philippines’ key outpost in the South China Sea, raising tensions during U.S.-Philippines military exercises.

China planted its flag on the reef, claiming sovereignty for the first time in years.

Although no permanent occupation is reported yet, the move heightens fears of future Chinese expansion.

The U.S. called the action “deeply concerning,” warning it threatens regional stability, the Financial Times has reported.

The Philippines is upgrading its nearby Thitu Island base amid growing Chinese pressure in the area.

Written by B.C. Begley