China is building two indigenous aircraft carriers as part of a broad modernisation programme that has rattled nerves regionally, sources said yesterday, as the government confirmed it was refitting an old Soviet carrier for training. China is ramping up military spending as the US discusses cutting its defence budget, though the Washington still far outspends China on security and is much more technologically advanced. President Hu Jintao has made the navy a keystone of China’s military ramp-up, and the carriers will be among the most visible signs of the country’s rising military prowess. “Two aircraft carriers are being built at the Jiangnan shipyard in Shanghai,” one source with ties to China’s Communist Party leadership said. The Defence Ministry has only confirmed the existence of one carrier, which was bought from Ukraine in 1998 and was once destined to become a floating casino. That will be used for training and research purposes, ministry spokesman Geng Yansheng said, seeking to reassure other countries that China would stick to its defensive military policy. But he said China it had a right to protect its extensive maritime territory and coast. “This is the sacred responsibility of China’s armed forces,” Geng said, in a statement carried on the ministry’s website (www.mod.gov.cn). “Building a carrier is extremely complex. We are currently refitting an old aircraft carrier, to be used for research and testing,” Geng said. “An aircraft carrier is a weapons platform; it can be used for offensive or defensive purposes. It can also be used to maintain global peace and for rescue and relief work,” he added. While Geng gave no timetable for starting sea trials, he said pilots were being trained to operate from the carrier. Sources with ties to the Communist Party and the military said that ship would likely be based in the southern island province of Hainan, which sits atop of the vital trade lanes of the sensitive South China Sea. The news comes as China has been flexing its muscles more aggressively in those waters, where a territorial dispute with Taiwan and several nearby countries, including Vietnam and the Philippines, has festered for years.  Geng said the timing “had nothing to do” with the tension there, though the message will be clear to many in Asia.  “ China can now project its power to even further away from its coastline ,” said Alexander Huang, professor of strategic studies at Taiwan’s Tamkang University. “ That will have significant security implications to forces operating in the Western P acific, including the US, Japan and Australia, so this is a watershed development. “ The carrier will add to regional concerns about China’s military modernisation and arms build-up. Defence spending is rising fast, and Beijing continues to test new high-tech equipment, including a stealth fighter. “China’s next moves have to be watched carefully, or there eventually could be a negative impact on maritime safety in Asia,” said Yoshihiko Yamada, a professor at Japan’s Tokai University. Xinhua news agency said it was the first time the government had confirmed it was pursuing a carrier programme. The old Soviet carrier’s refitting has been one of China’s worst-kept military secrets. Pictures of it sitting in Dalian harbour have circulated on Chinese websites for months, and it has been widely discussed in state media. China would be the third Asian country to have a carrier after India and Thailand, but it will take time before it can go to sea in Asian waters that have largely been the domain of the US navy since World War Two.  “It will be a long while before China develops a fully-fledged carrier capability, it will take a long time to train the necessary crews ... it may be up to decade until China has carrier capability,” said Tim Huxley, director for defence and military analysis at the International Institute for Strategic Studies in Singapore. Reuters